Real estate agent vs. FSBO: Why work with an agent?
According to the National Association of Realtors®’s 2019 Profile of Home Buyers and Sellers, 8% of Sellers chose the For-Sale-By-Owner (FSBO) route. Though that share may seem small, it’s still an important opportunity for real estate agents. Convincing these Sellers to use a listing agent is easier when you know the 2 primary reasons they choose the FSBO route.
Why do Sellers choose the FSBO route?
Generally, Sellers choose the FSBO route for 1 of 2 reasons.
- They know the Buyer personally
- They don’t want to pay commissions or fees
The 2 most difficult steps of FSBO
FSBO Sellers say there are 2 specific difficulties they face.
- Getting the right price
- Fixing the home up for sale
Real estate agents excel at these things. Here are some strategies you can use to convince these Sellers to use your services.
Getting the right price for selling the home
Getting the right price was the biggest challenge among FSBO Sellers who knew the Buyer personally. This is a good place for agents to start when convincing Sellers to use their services. Consider the median selling prices between FSBO sales and agent-assisted sales.
- FSBO median sales price: $180,000
- Agent-assisted median sales price: $280,000
Generally, Sellers who use agents get noticeably more money than FSBO Sellers. Sharing this fact with FSBO Sellers could make them reconsider doing it themselves. If you can provide proof of your successes around where they live, it can convince them to take your help.
Addressing a caveat in getting the right price
There is a caveat to this challenge. Though FSBO Sellers generally got much lower sales prices, their primary reason for selling themselves was to sell to a relative, friend or neighbor. So, those lower prices could be a function of that desire. If selling to someone they know is more important than getting top price, real estate agents may still have an inside track.
Consider this fact. Of all FSBO Sellers who knew their Buyer, only 12% said they’d do FSBO again. Compare that to 37% who would use a real estate agent and 51% who weren’t sure. There is opportunity for real estate agents in this space.
Agents who can position themselves as objective mediators can convince these Sellers to work with them. Selling a home is an extremely emotional, often complex event. It can be easy for those emotions to take over in the process, potentially ruining the sale or even the relationship. Agents can keep those emotions from spilling over. This can help Sellers get the right price without destroying the relationship the Seller has with the Buyer.
Fixing the home up for sale
For FSBO Sellers who do not know their Buyers, fixing the home up for sale was their biggest challenge. A well-staged home can sell more quickly and for more money. A poorly staged home can cause markdowns and frustrations. Agents who can stage homes or recommend proven stagers can minimize much of this anxiety. It’s important for agents to explain this clearly to convince FSBO Sellers to use their services.
Addressing a caveat in fixing up the home for sale
Of course, there’s a caveat. A whopping 63% of FSBO Sellers who did not know their Buyer went the FSBO route because they didn’t want to pay a commission or a fee. Overcoming this isn’t as daunting as it may seem if you use 3 strategies.
- Demonstrate your value. Show these Sellers everything you’ll do for them. From staging the home to marketing it to finding qualified Buyers, you can add value to their process while reducing the work they have to do. More money for less work is almost always appealing to Sellers.
- Show your work. The median sales price for agent-assisted-only sales is $282,000. That’s $31,000 more than FSBO sales when the Seller doesn’t know the Buyer. If you can show FSBO Sellers that you can get them more money for their home, even when accounting for a commission, it can be a draw for FSBO Sellers.
- Negotiate your fee. If Sellers show interest in the value you can bring but are still wary of fees, negotiate. Sometimes, Sellers just want to feel like they got a win. Your willingness to negotiate can position them for that win while still getting you the money you deserve.
Convincing FSBO Sellers to work with you is challenging but not impossible. Showing them that you can protect their interests is crucial. As you try these strategies, remember that 2-10 Home Buyers Warranty (2-10 HBW) can help you provide more protection to your Sellers. Our systems and appliances home warranty prevents unexpected breakdowns from sabotaging the sale.
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