For Sale By Owner Strategy Fathom Realty

How To Win For Sale By Owner Sellers

November 19, 2017
10:42 am

I have many new agents and even seasoned real estate agents ask me how to attract property listings. I have to be completely honest, generating buyer leads is a LOT easier than generating listing leads. Have you ever heard the term, “it takes money to make money”? This statement is especially true when it comes to generating listing leads. There are very few new fan-dangled websites or technologies that will help you generate listing leads.

Almost every successful listing agent will tell you that they built their book of business through hard work and a more “traditional” means of marketing. You have to focus on becoming a ‘name brand’ or ‘recognized expert’ for a given subdivision or smaller market area. What they usually fail to tell you is that once you have a solid base of listings, new listings tend to steadily fall in place. More specifically, listings generate more listings. Potential sellers often call on For Sale signs to speak with the listing agent about selling their home. Ensuring your sign, flyers and online listing photos look sharp goes a long way to generating more listing business. That’s not to say that once you’ve put in the initial investment to generate a dozen listings, you’ll never have to lift a finger again but we’ll save that for another article.

So what do you do if you’re just getting started and do not have the money to effectively market to your farm area? The first thing you will hear most brokers and trainers say is to call on Expired and FSBO listings. Unfortunately almost every agent is doing that. Fortunately for you, they all have the same message and rarely ever address the FSBO seller’s pains or needs. We’ll dive deeper into this shortly.


When you drive through your neighborhood or nearby neighborhoods, how many For Sale By Owner signs do you see? Almost every neighborhood has at least one sign sitting out there. These signs are a cry for help and with the right marketing plan. Your real estate sign could be in the yard instead of that $15 FSBO sign. Multiply that by 10 and you have yourself a pretty strong foundation to grow your business. Aside from the obvious new listing you just got, think about the other potential sellers in the neighborhood driving by your sign. Just as important, think about the buyer sign calls from that sign. Listings are some of the best lead generation machines available to the real estate world and FSBOs are a great place to start.

As I mentioned earlier, agents rarely ever address the FSBO seller’s pain. So how do you stand out of the crowd and address a FSBO seller’s pain? The first step is to truly understand their pain.


Simply put, the average FSBOs pain can be addressed in one word, “money”. If you want three more reasons then I would have to add money, money and who could forget, money. Keep in mind, when I say, “money”, I don’t mean money in the sense of greed. In fact, there are very few FSBO sellers that are listing as FSBO simply because they want to keep more of their equity to fatten their bank account. Let’s break that down a little more in order of reasons for listing FSBO.

    1. Seller has little or no equity in their home and little or no savings which means there are no funds to pay a Realtor’s commission and still cover their closing costs. *Note- in today’s financial climate, this is a pretty typical reason as to why we have so many short sales.
    2. Seller has equity but they need that money to cover the down payment on their next home. *Tip – this is a great opportunity to list their home for free if they buy their next home with you as their agent.
    3. Seller has equity but are retiring and that is all they have left to retire on. It’s hard to blame them for wanting to keep more of their equity in this scenario.
    4. Seller thinks Realtors are greedy and lazy and with a little Internet research, the seller can sell their home just as easily without paying that no-good, blood-sucking leech of a Realtor. All joking aside, there are a few people who feel this way and they’re not worth your time or breath anyway. From my personal experience, this group makes up less than 5% of FSBO sellers.

Now that you understand their driving motivation for listing For Sale By Owner, let’s talk about how you can address their pain and convince them to list their home with you. Virtually all Realtors try to convince the seller that they need to list with them by telling them why they are getting little to no traffic or scaring them by explaining how confusing or frustrating contracts and negotiations can be… seriously? Do they think the seller is stupid? These sellers know the MLS drives more traffic and they know contracts can be daunting. Don’t forget, they were the buyers at one point and have been down that road. Remember, in their mind, it’s not that they don’t want to list with an agent, it’s because they think they can’t afford to. If you want to address their pain then you need to come up with a way to allow them to list with you while still addressing the money issue.

So… you want to incorporate FSBOs into your strategy for generating listing leads. You understand what their pain is and why they are listing as For Sale By Owner. You’ve suffered through my ramblings. Now what? Here’s my sure-fire way to attract FSBO listings which ultimately attracts buyer leads through sign calls and more listings. I know this plan works because I have personally used it for years and have listed a lot of FSBO homes this way.

    1. Create a special FSBO listing plan with a deeply discounted listing commission. Ouch, I know, nobody wants to discount their service but don’t forget, it will generate buyer leads and more listing leads. I use the following plan:
      • Full service listing on the MLS for $500 up front non-refundable fee plus a $350 transaction fee at closing.
      • Seller only pays the buyer’s agent a 2.4% to 3% commission (depending on market).
      • Offer to credit the $500 up-front fee if they buy their next home with you as their buyer’s agent.
      • This plan saves the average home seller over $5,000 in commissions by basically cutting their listing costs in half.
    2. Locate all of the FSBO listings in your area. You can drive through your neighborhood, look in the newspaper and go to websites like to create your list.
    3. Create a flyer or postcard with your special listing plan and mail it or place it on their door once a week until they give in and list with you, take their home off the market or tell you to leave them alone.
    4. If you’re a brave soul, take it a step further and knock on their door. This is by far the most effective way to win them over. Make sure you leave a flyer or post card with them in case they need time to think about it.
    5. Keep a stack of flyers or postcards in your car’s glove box so you can quickly pull over when you see a FSBO sign.

If you are interested in generating listing leads then I’d like to encourage you to put this plan into action. I think you will be pleasantly surprised.

Important Things To Keep In Mind – Many states, like Texas, have eliminated “limited service” listings. There is a minimum service that you MUST perform. You must provide the seller with professional advice in selling their home, pass on any and all offers, pass on all communication from the buyer and/or buyer’s agent, and maintain all contracts and records of the sale. In short, your listing has to be full-service, no exceptions. However, this doesn’t mean you have to provide marketing above and beyond providing a yard sign and listing their property on the MLS.

Here’s the tricky part, you cannot charge an up-front non-refundable fee for simply listing a home on the MLS or in exchange for reduced commissions. You can however charge an up-front non-refundable fee for “enhanced marketing” so as long as you are providing real value above and beyond listing on the MLS and your yard sign then you can call the fee an “Enhanced Marketing Fee” on the listing agreement. Enhanced marketing like professional quality photos, showcase listing on, visual/virtual tour, and a single property website can count for this up-front cost. Otherwise you will have to charge the $500 at closing along with the $350 transaction fee. If there is any doubt, it would be safer to charge both of these fees at closing.

Last tidbit, some cities require you to have a solicitor’s permit to leave flyers on doors or knock on doors. Make sure you look into the requirements for solicitation in your city. I have seen permits range between $50 and $90 per year.