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   ARTICLE   |   From Scotsman Guide Residential Edition   |   January 2004

A For Sale By Owner Harvest?

There is a bumper crop of new client relationships to be harvested down at the FSBO Farm.   With the right tools and the right approach, more and more progressive and pro-active mortgage professionals are reaping nice harvests from the field of FSBOs.  

Consider these facts about this FSBO market:

  1. There are a lot of By Owner sellers out there.  In their 2000 Profile of Home Buyers and Sellers survey, the National Association of Realtors estimated that 13% of all homes sold were sold “By Owner”.   That is how many actually sold.   There are many more than this trying to sell By Owner.
  2. The NAR also estimates that somewhere around 75% of all FSBOs end up listing with a Realtor.   Would you be able to establish better Realtor partnerships if you could refer some of these listings to your Realtor associates?
  3. Realtors have a very difficult time penetrating the FSBO market. They face waves of rejection and sales resistance because “By Owner” sellers have already decided they don’t need a Realtor.  That leaves you, the mortgage professional, in a perfect position to market to FSBOs.
  4. The By Owner sellers are out there advertising to you everyday with classified ads and lawn signs saying, “I WANT TO DO A REAL ESTATE DEAL!”  And isn’t this truly the business you are in—meeting people who want to do a Real Estate deal.

So how can you work a FSBO farm so you can meet more people who want to do a Real Estate deal?  

Consider this simple 3-step process: 

  1. Offer the FSBO seller something of value for free.   How about free advertising on a For Sale By Owner web site?   The seller gets color pictures on a web site so the home can show itself around the clock.  Buyers can see it even when the seller is gone!  This is a great benefit to a serious By Owner seller and a wonderful door opener for you.
  2. Follow up with your FSBO advertiser by sending a campaign of marketing ideas to help him/her sell By Owner.   A series of “value added” marketing pieces keeps your name and number in front of the seller.  The result is that you become a trusted advisor about whom they think when they deal with mortgages or Real Estate services.
  3. Keep in touch with your By Owner seller and harvest buyer leads.  Offer them a free credit report and do their next mortgage loan.  If they end up being in the 75% who list with a Realtor, you can refer them to one of your Realtor associates.

Is this practicing Real Estate without a license?  No! You are providing advertising services only for the seller. You, of course, need to be careful not to exceed the limits of your licensing Will some Realtors think you are invading their turf?  Yes, but the Realtors to whom you send pre-approved buyers and listing referrals will love you for your efforts!  When mortgage people are good at serving the FSBO market, they obviously will meet more buyers.  Many of these buyers will not end up buying a FSBO house. Aren’t you in a position to pre-approve them and then refer them to one of your Realtors? What if your By Owner seller ends up being one of the 75% who end up listing with a Realtor?  Wouldn’t you be in a good position to refer that person to one of your excellent Realtor associates? When your FSBO advertiser closes on the sale of his/her home, most likely he will need a mortgage to buy the next home.  Who is in the perfect position to help with mortgage needs? 

You are already in the Real Estate industry.  Why not think about diversifying into FSBO advertising.  Position yourself to take advantage of the opportunities available in this niche market.  You may find it an effective way to build your network of referral sources and complement your Realtor business at the same time.   All by meeting more people who want to do a Real Estate Deal down on the FSBO Farm!


 


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