Re: Soliciting For Sale By Owners… - Posted by FSBO Seller
Posted by FSBO Seller on May 15, 2007 at 12:14:57:
I’m not sure on the legal side, but I’m not an attorney and I don’t play one on TV.
I don’t think it is unethical, you are simply advertising a service using direct mail and other similar advertising means. I would concur with Jimmy that trying to get FSBO listings will be difficult and success will come with those houses that have been on the market for some time. But you will also be competing with all the other realtors trying to get the same listings.
In order to get these types of listings, you need to show how your marketing plan is different from your competition and how it will produce the result of selling their house. They will be receiving lots of packets like yours as well as unsolicited phone calls. Your door to door approach will be less common, but you will need to learn to get past the pre-programmed “no thank you”.
Anybody can stick a sign in a yard, run a few ads, hold an open house and wait for the phone to ring, including the owner. FSBO owners are the type who say, "I can do that, " and then successfully do it and more. What service are you offering that they can’t do and aren’t already doing? FSBO service companies offer owners the opportunity to list on the MLS and decide whether to offer a buyer’s realtor commission in addition to other services that are cheaper than a realtor.
Some FSBO owners will pay a buyers realtor commission, others won’t. As Jimmy pointed out, there is opportunity by finding buyers for those who will.
Many FSBO owners do so either because of poor experiences like mine with mediocre members of the real estate profession or they do not see a realtor adding enough value to the transaction to justify the cost and therefore, don’t want to pay for it. Or both.
Without any prior experience, I sold my house in a week and had a list of potential buyers who wanted me to call if the deal fell through. My independent appraisal, advertising costs and attorney’s fees were significantly less than any commission rates offered to me at the time and I made a very nice profit on the sale. During this time, I had a plethora of phone messages, postcards and packets from realtors offering to list my house.
With the costly and lousy experiences I have had being represented by a realtor for other transactions, it would be a tough sell for any realtor to convince me to list my house with them or represent me during a purchase. Adding a middleman holds no value for me and I have had the experience of losing money due to realtor screw ups, yet they expected their full commission.
The reason I share this is to help you understand the mindset you will be dealing with for this particular market segment. It is very important to recognize that you will be fighting FSBO owner perceptions and/or experiences of realtors adding little or no value for the cost.
Bottom line: what do you bring to the table that makes it worthwhile in their eyes for them to pay you?
That said, Jimmy’s advice on building your reputation over time and good performance is right on.
Best of luck!