You get a line on a house that’s going to be put on the market, but when you make contact with the homeowner to arrange a listing presentation, you’re told that they’re thinking of planting a For Sale By Owner (FSBO) sign on the lawn. Or they have a friend who knows about real estate who will help them out.
Here is where your talents will be put to the true test. Trying to talk someone into paying you for something they think they can either do themselves or on the cheap can be a high-wire act. You must convince the homeowner that employing you will result in their making more of a profit even after your commission is subtracted. It will take confidence, skill and the ability to sell yourself. But it can be achieved.
“The internet and technology have really changed the real estate business, and gone are the days where we don’t have to justify our commission,” says Riezl Baker, REALTOR®/co-founder at Luxury Lake Oconee Real Estate Group in Greensboro, Georgia. “Nowadays people think that they could just list their house for sale on Zillow, but there is a big difference when you list your house with an experienced, licensed agent.
“The first thing I do is present the number of transactions I’ve closed in the past three or six months. Numbers tell the story. If you have produced and closed a lot of transactions, it means you have experience in dealing and negotiating, so you can get more for your client. An experienced agent will do a better job marketing the property. We’ll do a better job negotiating and a better job getting more money for it.”
Alex McFadyen, a REALTOR® with Coldwell Banker Advantage in Fayetteville, North Carolina, explains that when he meets with a home seller in person, he gives them a list of all the houses he closed that year, as well as a list of everything he offers for a full-service listing.
“And I make sure to show them the branding and marketing that I’ll do for their property that will help them get a higher value for it,” he says. “Those are the things I bring to the table that will be worth their time and for them to pay a little bit more, because they’ll get a higher return on their investment.”
Kelly Sand, a REALTOR® with CENTURY 21 Morrison Realty – HomeVest Team in Bismarck, North Dakota, says her strategy is different because her brokerage doesn’t negotiate the commission.
“You have to 100% believe that you are worth every penny you’re asking for, or you’re never going to be able to convince someone else that you’re worth every penny,” she asserts. “The other thing is if you’re just competing with other agents, stress what makes you unique. We have a financial advisor and people with construction experience on our team. That really helps with questions about the asset they’re selling or buying.
“We have also written buyers and sellers guides that can help them get through. We use all that to support our value as to why they should choose us.”
Talking FSBO Wannabes Out of It
Darryl Davis, owner of Darryl Davis Seminars in Wading River, New York, points out that with FSBOs, homeowners may feel that you’ve got all these plusses, but are put off if you’re expecting a large commission. “They think they could probably save half that money and sell it quickly by themselves,” he says. “So, how do you prove to a homeowner that they’re actually going to lose money, not save money, by going the route of doing it on their own?”
McFadyen admits that recently, if a house was priced correctly, it would sell for above listing price. But with the shifting market over the last six months or so, things have changed.
“Now you need as much exposure as you can get,” he says. “You need as many buyers through the door in the shortest amount of time as possible to drive the price up. As the market’s changing, more self-sell owners will be converted to listing with an agent because it’s going to take a lot more work and a lot more time to get the property sold. I’m a full-time agent and some homeowners don’t have the time to market and show their property if they’re busy or out of town, so that’s something I know I can bring to the seller.”
“It goes back to simple supply and demand,” adds Sand. “We need to increase the audience in order to increase the demand. And we can do that as agents. For Sale By Owners cannot do that. And then just bringing out the net sheet, like, what do you want to net on this? If I can get what you want, why would you not list it with me? I have an increased audience, so I can get a higher price.
“And you also get a full-time coach on negotiations, contracts and contingency removals, including inspections. We’re a resource because we know lots of people who can help them, whether they are trying to fix something, or need movers or whatever it may be. And they have an advocate that has fiduciary duties to them.”
Baker contends that the most important thing is market knowledge, that an experienced and licensed REALTOR® has their pulse on the market. They will know if a neighborhood is trending up or down, and can price the property based on what’s going on in the market.
“You need to provide a list of the different things you will do in order to sell the property at a higher price,” she says. “We pride ourselves on spending a lot of marketing dollars to get to the audience who will be attracted to our listings. For Sale By Owners don’t get that marketing and exposure. And it has been proven that For Sale By Owner takes longer to sell. That’s why they sell for less than if listed with an agent.”
That point is seconded by Davis, who expresses that other than price, there are a lot of reasons why someone should not sell their own home. “They should seek out a professional, just like they have other professionals in their life, whether it’s a doctor, an accountant, an attorney or financial planner,” he says. “So, how do you convey to a homeowner why it’s better for them to work with a licensed real estate professional versus doing it on their own?”
Sand explains that part of the problem arises from a perception that selling a house is not truly a skill or profession.
“A lot of recent media, whether it be television or whatnot, paints the picture that anyone can do it,” she says. “They’ve done that with interior design and now they’re doing it with real estate agents, but in reality, that’s not the case. We are professionals, we are licensed, we have experience. We also have resources. There are legal contracts that people are not familiar with.
“This is what we do every day, so having that representation is important to walk you through something that is legally binding, and could put you in a pickle if you don’t understand the verbiage in a contract. We have relationships with others that you’re going to deal with in the transaction, whether it be the lenders, title companies or inspectors.”
Qualifying buyers is another major plus agents bring to the table that home sellers cannot do themselves. They rarely consider that aspect when planting the FSBO sign on their property, talking to anyone who responds and inviting everyone to tour the house. Not smart, what with security issues, safety issues, pandemic issues, etc.
“Do you really want to deal with strangers calling you on the phone, wanting to see your house?” asks Baker. “How do you qualify them? That’s a really, really big thing that a licensed REALTOR® obviously can do. We work with the agents directly, and obviously we have it on the MLS.
“People don’t realize that it takes a lot of steps and a lot of work. It’s not just putting it on the MLS and putting it on the internet and that’s it. One thing you can do as an agent is come up with a list of the many steps you go through in order to successfully sell a house.”
Selling Time a Major Factor
Then there’s the time that must be spent selling a house. Does a homeowner understand that they will need to be available practically 24/7? Prospective buyers expect to see houses on their schedule, not the owners.
“The most important thing in my opinion is time; time is money,” says McFadyen. “You want to make sure that the buyers coming to your property are pre-approved, that they can purchase the house. And you want to make sure that the people coming to your house are actually looking to purchase it, that they’re not coming for other reasons.
“We do so much more than someone not in real estate. We can hire contractors, make sure lenders get the appraisal ordered and make sure everything’s tracking on time for the closing. We’ll get them in contact with the closing attorneys and take care of the entire process. Showing sellers all we do in a transaction should make them realize that it’d be best for them to hire a professional real estate agent to take over the sale.”
There are also the little things that can make a big difference. Connecting with the seller on a personal level helps, so providing unique information they can relate to can make the difference.
“If they’re most concerned about showings because they have little ones or pets or whatnot, alleviate that problem right then and there,” says Sand. “If their biggest issue is move-out time, that they don’t want to move for three months, even if they sell right away, alleviate that problem. Listening to what they are concerned about versus just telling them what you can do is super-important.”
“The first thing I ask the sellers is, ‘What drew you to this home?’ That really opens up the conversation, and they start telling me about how many houses they looked at before this house and why they fell in love with this house,” explains Baker. “That breaks the ice, gives me a perspective about the sellers and also about the house that you’re hopefully going to get to list.”
“I’m a younger agent, so I get a lot of kickback from sellers,” adds McFadyen. “Showing them that I have had success and I know what I’m doing brings a lot of value when I go on listing appointments. Then it’s engaging with sellers, making sure you’re really listening to what they need from you, so moving forward you can give them the best service.”