FSBOs Can Add Fizz to Your Biz
Tapping the for-sale-by-owner market could lead to more referrals
By Molly Greene
In a tight market, even top producers and old pros are searching
for new ways to find consumers who
need financing. That’s why working with
for-sale-by-owner (FSBO) sellers can be
a smart addition to a mortgage broker’s
These sellers are selling their property
without a real estate agent’s representation. Why would homeowners assume
the burden of selling real estate without a
professional’s help? In many cases, it’s because they do the math: In a scenario where
homeowners owe more on their loan than
the price they could realize in a sale, they
may take the FSBO route to save money that
would normally go to a real estate agent.
Although the concept of connecting
with FSBO sellers isn’t new, many real estate agents view this market only as potential listings. Their typical approach is
to advise sellers to sign a listing contract.
For mortgage brokers who understand
the bigger picture, however, solid FSBO
relationships are worth building and can
be a lucrative business resource. A single
FSBO relationship can translate into a great
deal of business from multiple sources
and can provide long-term returns via
of the sale. You also can share the contact
information of prequalified buyers who
decide not to purchase the FSBO seller’s
home but who are still in the market.
When the time is right, you can offer your clients information about the
benefits of working with a competent
real estate agent and provide names and
“For mortgage brokers
who understand the bigger
picture, solid FSBO relation-
ships are worth building
and can be a lucrative
Offering your services
As you seek FSBOs, you first should offer
your services as a neutral third party who
can help contact and prequalify buyers. As
obvious and valuable as this service may
be, it might require a patient, sophisticated
approach to convince a seller of the significant benefits that come with working with
a mortgage broker during the process.
These sellers likely are getting many
calls from real estate agents, and distrustful FSBOs may decline your preliminary offers of help. Use your best people skills to
finesse a meeting, and explain face to face
exactly what you can do and why your services are beneficial.
Here are some examples of what you can
do for FSBO sellers:
■■ Prequalification services: You can contact potential buyers and establish that they
can qualify for adequate financing to purchase the home and that they have the funds
for a downpayment and closing costs.
■■ Financial assistance: You place the advertisements, field the responses, filter out
the real estate agents and brokers, and have
access to all the leads.
■■ Physical presence at open-house events:
A third-party presence will add security and
deflect the potential discomfort sellers may
have about dealing with buyers alone.
■■ Third-party referrals: You can provide
literature or referrals to home-stagers if sellers must improve the home’s presentation.
You also can offer names of experienced
real estate agents if the sellers decide to list
their home and direct them to ancillary
services if they locate a qualified buyer and
sell the house.
Another method is to seek a real estate agent who wants to partner directly
in your campaign and use a tag-team approach with FSBO sellers. The agent can
answer questions about the sales process,
provide a comparative market analysis,
market information and staging tips, and
you can provide financing information
Working with FSBO sellers is an excellent way to generate loans without relying
totally on your agent relationships. It also
lets you supply your agent-partners with
business. There is no better way to cement
real estate agent relationships than to provide solid buyer and seller leads.
■■ Share lists of necessary forms: Advise
sellers where these can be purchased. Explain to the sellers that you can’t provide
forms or help complete them because you
may be held liable if there is a problem.
■■ Secure financing for the sellers’ next
house: You can provide sellers with an estimate of proceeds based on the projected sale
price of their home and collect documentation to prequalify them for their next loan.
It’s clear that mortgage brokers can
provide valuable services to a FSBO seller.
Once a seller understands the possibilities, forming these relationships is not actually difficult. It makes too much sense.
If you persevere with a friendly, interested demeanor, your persistence may
convince them to rely on your knowledge
As you gain their trust, your FSBO clients likely will ask about current real estate
market conditions and the sales process.
They may rely on you to:
■■ Share ideas that will enhance the prop-
■■ Advertise the home (if you offer) and attend open houses;
■■ Provide names of industry affiliates who
will smooth and speed the transaction once
a purchase agreement has been signed;
Help them find lists of required forms
and booklets; and
Help them get a loan on their next
Your generosity likely will translate
into gratitude on their part, and they in
turn will refer friends and family who
You can find FSBO sellers by scanning
classified ads and local real estate magazines, looking for yard signs, and visiting online sale sites. In addition, real
estate franchises that provide minimum
seller services are excellent resources. If
you want to locate companies that deliver leads to you, search “FSBO leads” on
Lower property values, high inventory levels in the current market and
typically slower sales in winter will probably create a scenario where more sellers are forced to walk the FSBO path. If
you’re not already working this niche, it’s
time to consider the opportunities FSBO
Illustration: Dennis Wunsch
Enhancing agent relationships
As you maintain contact with each seller,
you can counsel your agent-partners about
the homeowner’s attitude and the status
Molly Greene was first
licensed as a Realtor in
1985 and has worked in
marketing for several national lenders. She is now
an independent writer for
the real estate industry
and author of For Sale
by Owner, a booklet designed to introduce
unrepresented FSBO sellers to the concept
of working with an agent or mortgage broker
during the sale. For more information or for help
with a writing project, e-mail molly@cableusa.
com or call (760) 765-1545.