Focusing on the real estate niche of FSBOs and targeting them with your lead generation campaigns can be an excellent opportunity to get motivated and warm seller leads.
This is one of the more popular seller segments you can target as a real estate agent, and not for nothing; several companies offer FSBO seller contact data for sale.
However, there are also downsides and pitfalls, and you want to know what you get yourself into when working with them.
This article will provide you with the ultimate guide about FSBO leads and will cover…
- What FSBO homes and leads are
- The differences between FSBO leads and expired listing leads
- The four benefits and challenges of FSBO leads for real estate professionals
- FSBO vs Real Estate Agent
- How to get FSBO leads
- FSBO leads persuasion and conversion strategies
- Whether getting into FSBOs as a real estate niche is a good idea
What Are FSBO Homes and Leads?
“FSBO” stands for “For Sale by Owner,” and, as the name suggests, the key characteristic of FSBO homes is that they are properties that owners want to sell without the help of a real estate agent or broker. Crucial for later, the reason to do this is that the seller…
- Had a bad experience with a former realtor
- Just doesn’t want to work with real estate agents or brokers
- Wants to save on commissions (one of the main reasons)
- Wants to have more control over the sale of their property
Although many owners are not aware of all the ramifications of selling on their own, aware or not, they will be in charge of listing and marketing the property, showing it to potential buyers, and the whole negotiation process.
FSBO homes can often be found on property listing websites (e.g., Zillow) or classified websites (e.g., Craigslist).
In marketing, a lead is a potential contact to whom you can offer your products or services that has already shown some basic interest in them.
Based on this definition, an FSBO lead is an FSBO homeowner that has already shown some basic interest in your real estate services as a real estate professional.
The term “FSBO leads” is often used as a synonym for FSBO owner contact information, especially by companies offering this contact information for sale. But strictly speaking, these are not FSBO leads (yet).
To convert them to leads, you need to put in some extra lead generation work, such as, for example, prospecting.
As you will later see in the lead conversion and persuasion part of this article, you want to keep in mind that this type of property owner doesn’t think they need your services, although they actually do.
Bridging this gap between them believing they don’t need you and helping them find out they actually do is the main task regarding converting FSBO leads into your clients.
What’s the Difference Between FSBO Leads and Expired Listing Leads?
To understand the difference between FSBO leads and expired listing leads, you can imagine FSBO leads as the next level of aversion towards real estate agents after expired listing leads.
While the property owner of an expired listing may still be frustrated with their real estate agent not having sold their home (although often because of their fault of not listening to professional advice), they may still relist it with the current agent or switch to another one.
There is still a 28% chance that they even relist it with the current agent, as I already covered in my article about expired listings (source).
But the next level of “realtor aversion” is the FSBO seller. As a realtor, you must climb an even steeper hill to convert them into leads.
Because these sellers made a conscious decision not to work with realtors.
In the worst case, it could be the owner of the expired listing from above relisting it with the current real estate agent, who doesn’t sell the property again, relisting it again with a different realtor, and again not selling it.
Now this owner is pissed and develops some “boss-level” aversion against real estate agents and decides to go on their own to sell their property.
This “evolution” from an expired listing lead to an FSBO lead is important to remember so you know what you can be up against later in the persuasion and conversion part.
However, the above “burned seller” turning FSBO would be the worst case.
The easier to convince FSBO sellers are the ones wanting to sell on their own from the start without having had any bad experiences with real estate agents in the past. The basic “realtor-aversion” may still exist, but it’s not on the same level.
4 Benefits and Challenges of FSBO Leads for Real Estate Professionals
From the above, I created a short overview table with four benefits and challenges of FSBO leads for real estate professionals so you can get a better picture of the situation.
|FSBO Lead Benefits||FSBO Lead Challenges|
|You can find the seller contact information often for free||You will need to be able to deal with "realtor-aversion"|
|Direct access to seller contact data without having to split commissions with another agent||Be prepared to get more rejections|
|Higher chances of the sellers being motivated||Can be difficult to show them how they can benefit from your services|
|Higher barriers to entry, because they are usually reluctant to work with a real estate agent, which means less competition||The risk of turning a FSBO property into an expired listing is higher, when the seller is reluctant to listen to the realtor, and the realtor is desperate to list a property.|
FSBO vs. Real Estate Agent
In preparation for the persuasion and conversion part of this article, you may also want to know how real estate agents or realtors fare against FSBOs.
So, I prepared a comparison table below.
|FSBOs||Real Estate Agents|
|Responsible for marketing their own properties||Usually more experienced with the right marketing channels|
|The risk to accurately price their properties because of limited or no access to the same data and market analysis tools as real estate agents.||Access to more marketing tools and platforms that can help to promote a property|
|Likely less familiar with the legal aspects of selling a property.||Have the training and experience to navigate the requirements for often complex real estate transactions.|
|Less skilled and experienced in real estate negotiations||Usually more skilled and experienced in real estate negotiations.|
|Higher time investment since they have to do all themselves (listing, markeing, showing, etc.)||Save sellers time in the often time-consuming and labor-intensive process of selling a property.|
How to Get FSBO Leads?
Similar to what I already discussed in my article about expired listing leads, to get FSBO leads, you enter the world of generating real estate seller leads (my article).
So, the same strategies apply, only that you already know what real estate niche (my article) you are in and whom to target: owners of FSBO properties.
You can consider sellers of FSBO properties as potential leads in the warm or hot categories (read my article on the different real estate lead types here).
When we look at the graphic above, we can already exclude the fact that these are people not even aware of the need of wanting to sell their property. These would be “ice cold” leads.
We can also exclude the scenario that they would be sellers who have thought of selling occasionally but have yet to decide.
Since you can clearly find FSBO properties on different websites, this alone already proves that a seller must be asking themselves something like… “How can I sell my property?” Thus, these are at least potential warm leads.
Because of that, you want to focus on lead generation methods more suitable for at least warm leads, and these are mostly outbound lead generation, such as…
- Direct mail
- Cold calling
- PPC Ads on search
- PPC Ads on social (with reservation)
I put “with reservation” in brackets for PPC ads on social media, such as Facebook, because you cannot use the standard approach for this type of lead.
Because on social media (including Facebook), the users are usually not actively looking for a solution to their problem and are mostly unaware of it.
But you could use the contact information you collect about owners of FSBO homes and run a retargeting campaign, so it is a much more targeted campaign.
You could run a similar retargeting campaign with Google Ads.
To start running your FSBO outbound lead generation campaigns, such as cold calling or direct mailing, you ideally get the owner contact data first.
Here, you can go down two routes: a paid one and a free one (time-consuming, though).
The paid one includes companies that provide owner contact data you can use, such as:
- Vulcan 7 (my review article)
- Offrs (my article)
- Mojo Sells (my review article)
- My +PlusLeads
You may also read my article about real estate farming companies, where you can find more providers.
When you are short on time, the above is the faster way to approach it.
If you have a bit more time, you may start your own lead generation campaign with Google search ads to target the right keywords for FSBO sellers and an exact target location.
Starting a campaign from scratch without using the above providers takes more time since you will have to experiment for some months until you see results.
However, once you have a working campaign, you will be independent of the above providers.
The free route to get FSBO contact information for your lead generation endeavors would involve…
- Searching online residential real estate sites and manually adding the owner contact information into a list (a hybrid version between the above providers and manually finding them would be using a scraping tool, as I covered in this article)
- Searching FSBOs in county delinquent taxpayer lists
- Researching Facebook Groups
- Searching on classified websites such as Craigslist
FSBO Lead Persuasion and Conversion
It is one thing to get or generate FSBO leads and another to convert them from leads into your clients. In this case, you enter the world of sales, a subcategory of persuasion.
You may not be able to reach them via phone at first. In that case, you can start a nurturing or follow-up campaign to warm them up a bit.
For that, you want to read my articles on email marketing and follow-ups here, here, here, and here.
What follows are principles you can use when you finally get them on a live call or conversation.
Persuasion is important in lead generation. Here, you need to use the right message applying copywriting principles in the proper real estate marketing channel to target potential leads.
In the case of live sales, you also use persuasion techniques. The difference is you push leads further down the sales funnel and convince them to buy your service, in our case, signing a listing contract.
So, how do we do that?
I wrote already several articles about real estate sales, which you can read here, here, here, and here.
There are certain evergreen principles you can apply no matter what real estate niche your specialty is. The only things that change are your prospects’ needs, problems, and typical emotions.
That’s something to remember for later.
Since copywriting is selling with words, you can design and apply most, if not all, of it to a conversational situation. You may want to read this article about copywriting in real estate here.
You can find different teachers and information; some swear by scripts, others (myself included) by systems you can use by internalizing them via role plays.
My favorite one is from Claude Diamond and is called the G.U.T.S. sales system.
What I like about it is that, if done right in the case of FSBOs, it protects you from making a deal with an owner that likely will become an expired listing.
How so? Because it qualifies the prospect early.
Not all, but some of the system’s elements are the following:
- Asking good questions
- Qualifying early
- Mutual respect (this means that, more often than not, you expect respect from the prospect)
- No presentation too early
- Various reverse psychology tactics
In contrast to copywriting, in a live sales conversation, you can react dynamically to what the prospects answer to your questions.
Similar to copywriting, where you first research the prospect’s needs, problems, pains, etc., you need the same in sales conversions. You ask questions about their needs.
And since you are the one asking questions, you want to be a good listener and apply what is considered good communication skills according to this source (source):
- Providing and accepting feedback
- Empathy (e.g., “Oh, I am so sorry that you went through two realtors that couldn’t sell your home. I understand that you made the decision to sell your property as an FSBO”).
- Responsiveness (you will need role-play training for that one)
- Picking up nonverbal clues (in the case of personal meetings)
To avoid wasting your time and that of your FSBO prospect, you want to find out early about their time frame and whether they would be open to working with a realtor.
In copywriting, you don’t present your offer immediately but rather raise the interest and help them picture a life where their need is satisfied and their problem solved.
That’s why I like that you don’t give an early presentation in the G.U.T.S. sales system. From a copywriting standpoint, it makes sense.
Asking the right questions, showing empathy, and helping the FSBO prospect understand that they have a problem and agitate it a bit will also help you gain trust and build rapport with the FSBO owner.
The above may also answer the question of what you say to get an FSBO listing.
It implies whether you use the one-in-a-million but non-existing script that convinces every FSBO owner to work with you.
It’s not what you say but rather what you ask and how you can redirect the answers into showing them that you can help them sell their home.
By the way, this article covers real estate scripts a bit more in-depth.
With an FSBO objection, you didn’t see coming and have never heard, you may quickly reach the limits of a well-prepared script (I speak from my own experience).
So, now you may ask yourself how you can overcome FSBO objections and close the owners.
There is one key principle Claude Diamond teaches when it comes to objections: they offer you the opportunity to close. You only get into trouble when you become defensive and don’t answer an objection with a question.
There are other techniques, but let’s stay with this one. You can find many more role-plays on his YouTube channel, including handling objections.
Below, you will find three typical FSBO lead objections and how you can handle them in the way described above:
Objection 1: “I prefer not to pay a commission and lose money on the sale of my property.”
Answer: “Sure, I can understand that… Who doesn’t want to save some money? How much money would you lose if we talk in three months and your house hasn’t sold yet?”
Objection 2: “I can sell my property just as effectively on my own without the added cost of a realtor.”
Answer: “Sure, and I hope you do. So why don’t you just keep selling it on your own? But let me ask you something, Mr. Seller, there is a reason why we are talking today… what is that?”
Objection 3: “I have had bad experiences with realtors in the past, I don’t want to have to live through that again.”
Answer: “Mr. Seller, that sounds horrible, and I am sorry to hear that… Suppose I could give you a different experience, an experience that many of my past clients can confirm, in which I sell your house at a decent price within the next four weeks, what would you say next…?”
And here are 11 questions to ask your FSBO seller prospect as part of your conversation, including qualification:
- Why do you want to sell your house, and why did you decide to do it on your own?
- For how long have you been selling your property?
- Are you open to working with a real estate agent? What commission would you be comfortable paying?
- Is it you who would decide whether to work with a real estate agent, or is there someone else you would need to talk to?
- When at the latest do you want to have your home sold?
- What are you planning to do after the sale of your home?
- Could you tell me how you arrived at your asking price?
- Did you get any offers on your property in the past? Why didn’t they turn out?
- What are your property’s most appealing features to a potential buyer?
- For how long have you been the property owner, and what improvements and upgrades did you make?
- What do you think needs repairs?
Is Getting into FSBOs as a Real Estate Niche a Good Idea? (Final Thoughts)
Getting into FSBOs as a real estate niche is a good idea, provided you know what you get yourself into regarding the upsides and downsides.
The seller prospects you find and can market to have a higher chance of being motivated and warm regarding their awareness level.
Because they may be reluctant to work with real estate agents, the barriers to entry are higher.
This is a good thing because it will weed out your competition. However, it also requires good persuasion skills to convince them to switch from selling independently to selling with your help.
If you don’t manage to qualify them well, you may run into the risk of turning their FSBO property into an expired listing.
This article has been reviewed by our editorial team. It has been approved for publication in accordance with our editorial policy.