For sale by owner (FSBO) leads are just as deserving of an investor’s attention as any other type of lead. In fact, those that know how to navigate the FSBO waters with precision and tact could find them to be a particularly lucrative marketing strategy with an attractive return on investment (ROI).
In their simplest form, for sale by owner leads are just that: owners that have expressed interest in selling their homes without the assistance of a professional real estate agent or Realtor. In other words, to be recognized as an FSBO lead, homeowners need to have met two very simple criteria. For starters, they must have expressed interest in selling their property at one point or another. That’s not to say they have to sell their property, but rather that they have considered the possibility of doing so; remember, these are merely leads. Even the thought of selling a property on the owner’s behalf is enough for investors to inquire into for sale by owner leads even further. Additionally, as their name would suggest, FSBO leads should be operating without the assistance of a real estate agent or Realtor.
Depending on the owner, or better yet their experience in selling homes, neglecting to enlist the services of an agent can result in a nice savings. Realtor fees and agent commissions can amount to tens of thousands of dollars on some sales, so avoiding working with respective professionals could potentially be well worth it. That said, not all homeowners have the luxury of knowing how to sell homes without at least some assistance from an outside source. Those without sufficient knowledge about the selling process may find it to be particularly stressful.
For sale by owner leads will, therefore, vary in strength, as the sale will depend almost entirely on the homeowner’s experience. Savvy investors, however, may be able to use their knowledge of the industry as leverage to acquire such a deal at a value. Of course, to pursue an FSBO lead, you must first know how to find one.
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As I already alluded to, the viability of an FSBO lead will depend predominantly on the seller’s experience. However, that’s not to say there aren’t other factors to consider when pursuing for sale by owner leads.
Homes for sale by owner occupants have proven they deserve the attention of savvy investors. Not unlike homes sold by real estate agents and Realtors, houses for sale by owner occupants need to be factored into real estate investors’ marketing strategies. If you are interested in marketing for homes for sale by owner, try using some of these techniques:
Dedicated FSBO Websites: Not surprisingly, the internet has proven to be a variable treasure trove of FSBO homes. Web-based FSBO services, in particular, have proven very useful in taking the pain out of looking for homes being sold by their current owners. For a fee, sites like REDX, Landvoice, and Vulcan will do all the heavy lifting for you. More specifically, however, these sites will search just about every necessary source of FSBO loads and compile them nicely for you, all in one place.
Craigslist: Not unlike the previously mentioned dedicated FSBO sites, Craigslist has a great deal of FSBO homes of its own. Unlike those sites that are dedicated to compiling the data, however, Craigslist is free; you just need to know how to search for the homes that meet your criteria. Fortunately, a lot of FSBO loads will identify themselves as such, so be sure to keep an eye out.
Zillow: Zillow has done some of the heavy lifting and already identified a lot of “for sale by owner” homes. Simply take some time out of your day to browse Zillow and you’ll find it quite easy to find homes being sold without a professional real estate agent.
Local Newspapers: Local newspaper ads are not dead, but rather a great source of hyper-localized listings. There’s absolutely no reason you can’t expect to find some FSBO leads as you sit down to a morning cup of coffee and a newspaper; just make sure you are looking in the area you would like to invest in.
Of course, simply finding for sale by owner leads isn’t enough; you need to know how to translate them into an actual deal if you intend to benefit from them. If you are looking to take your leads to the closing table, try using some of these tried and true strategies:
Research The Leads: Take some time out of your busy schedule and research the lead you intend to do business with. Learn anything you can that will help strike up a conversation, as building a relationship with the seller is the first step in initiating a deal. Additionally, try to uncover their motivation. Why is it they are selling? If you can pinpoint the exact reason (it’s not always money), there’s no reason you shouldn’t be able to leverage what you know in the deal.
Research The Listing: Of course, it’ll pay to familiarize yourself with the listing, too. Mind due diligence and run “comps” to analyze the deal. The idea here is to cement your reasoning for your offer. If you can come up with concrete evidence to support your initial offer, you’ll have a much easier time getting your deal accepted. If, for example, comps are well below the subject property, you may have a valid point to make by offering a similar price, whether it’s more or less than the asking price.
Be Prepared To Negotiate: There’s a good chance you’ll have to negotiate on a for sale by owner deal. That said, this is where most FSBO deals are made or broken. Again, how things proceed from here will depend on the owner’s experience. If they are less familiar with the process, you may be able to negotiate a favorable deal.
Exercise Persistence: Few things will prove more valuable to FSBO negotiations than patience. As most sellers are going to be relatively inexperienced, the likelihood of “speed bumps” along the way is almost inevitable. Whether those obstacles are your fault or theirs is a moot point, however. There’s no point in rushing things or getting frustrated. Instead, be patient and let the seller work at their own pace. The moment they sense a lack of patience, they may forego a deal with you all together. That said, expect to negotiate back and forth, and be prepared to tackle issues as they arise with for sale by owner leads.
Follow Up: It is unfair to expect homeowners selling their own properties to be excellent communicators. Chances are, the selling experience has them stretched a little thin. That said, it may be in your best interest to be proactive and maintain the lines of communication. You never know, maintaining a conversation may be all it takes to close a deal. At least one thing is certain: you will never know until you try.
For sale by owner real estate is absolutely deserving of an investor’s attention. At the very least, it’s an alternative source of leads than can only help their position. Real estate is, after all, a numbers game; the more leads you can bring in, the more likely you’ll be to land your next deal. That said, for sale by owner leads shouldn’t be ignored; they have just as much potential as the next property.