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   ARTICLE   |   From Scotsman Guide Residential Edition   |   February 2016

Find the Formula for Success

For-sale-by-owner homes are a quick, inexpensive way to attract new business

Find the Formula for Success

The mortgage industry is a delicate science. Finding the right mix of products, clients, lenders and referral partners is never easy — and it’s arguably never been tougher than in today’s environment of constant regulatory change.

That’s why, when you find something that can make the science a little easier, you should run with it. With just a little effort, originators can add one of those special ingredients that puts their formula for success over the top — the for-sale-by-owner niche.

Being a mortgage professional in today’s constantly changing lending environment is challenging, to say the least. Originators often waste much of their valuable time and attention putting out fires, keeping up with regulations or chasing conditions on their files, when they could spend that time prospecting for new leads instead.

Adding to the difficulties in the industry is the fact that finding steady lead sources has become like discovering the proverbial needle in a haystack.

Times are changing, and if you want to succeed in today’s market, you also have to change with the times. The same old way of finding leads is going extinct. Rather than trying to go out and find leads by relying on others, successful originators need to learn how to create their own lead sources and use those as leverage in their business.

The Internet has changed the way consumers shop for houses and loans, and also has created new opportunities for originators to create those lead sources by themselves. One good way of doing that is by tapping into for-sale-by-owner (FSBO) homes.

Value proposition

In the past, a common mantra was that the FSBO niche was just for Realtors. This is simply not the case in today’s market. Mortgage originators can take advantage of working with FSBOs as well. This is an untapped market that many originators have ignored, but when done properly, FSBOs can be a hugely profitable pillar of any business. Best of all, this niche is free and easy to tap. Imagine what your business will be with several additional closings, all of which were free to target.

First, know the value proposition you offer to owners who want to sell their homes. As an originator with a wide sphere of influence, you will be able to help market this property, online and through your vast referral system.

Second, know where to find these FSBO leads. There are several large, free websites where owners can list properties they wish to sell. By simply searching through these sites, you should be able to find plenty of listings in your local market — and be able to contact the owners. Searching these listings for only an hour or so can earn you business that keeps you busy all week long.


Working the FSBO niche generates a solid income stream of purchase, referral and refinance leads that results in more closed loans without having to rely on other affiliates, such as Realtors, CPAs, tax preparers and divorce attorneys. Many of these sources are still great ways to generate business, but if their business goes south, so does yours. Do you really want to give that much control over your destiny to someone else?

When done properly, FSBOs can be a hugely profitable pillar of any business.

By working on FSBO properties, you can cultivate relationships with other solid lead streams, such as sellers, buyers, real estate agents and property investors. And by taking control of your lead sources, you will have other professionals knocking on your door for your business. In addition, imagine choosing who you wish to work with, and not chasing other affiliates around, begging them for their business like other originators have been taught to do.

You also will have sellers refer to you their friends, family members, neighbors and co-workers who are looking to buy, sell or refinance a house. You also may experience owners pulling their for-sale homes off the market, opting for refinancing instead. By staying on top of the FSBO niche, you open other opportunities that were closed before.

Property investors are likely to call you based on your marketing efforts. This is where you can start a relationship with a property flipper. Once they are ready to sell their flipped property, you can help market that property as well and become their mortgage professional of choice.

Finally, you’re going to have Realtors calling to see if they can list the home for sale, as they are taught to target FSBOs as well. This is where things get really interesting.

The Realtor call

When real estate agents call and discover you are an originator, something different will likely happen. Suddenly, they are going to try to sell themselves and their services to you, and let you know how you can benefit working with them.

This is something you are probably not used to having as an option: Agents actually calling you to work with them. Usually it’s the other way around, and as an originator, you are the one trying to get your foot in the door. 

It feels good when other people call you to see how they can earn your business. You are now in control of producing buyer calls that you can prequalify and refer to one of your preferred real estate professionals.

Now you have total mastery over the only things an agent really cares about: buyers, sellers and listings. This is what FSBOs can do for your business.


There are a couple of important things to keep in mind when dealing in the FSBO realm. First and foremost, make sure you stay in compliance when it comes to discussing agent commissions and offers. Mortgage originators are not licensed to negotiate commissions or sales price. You, however, can ask the sellers if they are offering any commission to a buyer’s agent, and you can include that information in your marketing efforts.

In addition, stay away from discussing any offer on the home with the prospective buyers. All offers need to go straight to the sellers, and they can work out any details on the offer with the buyers and, if applicable, the buyers’ real estate agent or other representative.

Your main goal is to have the home sellers’ best interests in mind. When you have that mindset, the goodwill you build steadily brings in more business. Working the FBSO niche is like anything else — communication and customer service should be the main focuses, and with them, good things will happen. 

Set goals with this niche and you will not need to chase other lead sources that take significant amounts of time and money to develop. You are creating your own lead source that you control, and you are the one who determines what you do with that business.

•  •  •

As you can see, FSBO properties are not just for Realtors. Originators can target and take advantage of this market even more effectively than real estate agents and reap huge benefits with steady and fresh leads. 

Start thinking outside the box on how you can control your business and drive more leads and closed loans directly to you. This is a niche that will do just that. 


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