Top Agent FSBO Conversion Plan

Most agents, at some point, make an effort to convert FSBOs to Listings. But more often than not, they give up after getting abused, maligned, demeaned, cussed-out, and hung-up on. That’s unfortunate, because more than 90% of For Sale By Owner (FSBO) homes are eventually listed with an agent. That means converting FSBOS to listings truly is a lucrative opportunity, and many top agents have learned that there’s a better way to do it.

We spoke to several of our top producing real estate clients and asked them what they are doing to convert FSBOs, in addition to their custom farm marketing. The tactics they shared comprise this golden 5-touch FSBO Conversion Plan, which we sincerely hope you will put into action.

After FSBO Fatigue grinds these sellers to desperation, the vast majority finally face a humbling reality: a buyer has driven past their home dozens of time – but in the back seat of a Realtor’s car. So now Mr. & Mrs. Seller will have to decide whom to call. By putting in to practice a good FSBO Conversion Plan, you can raise the odds substantially that you’ll be the agent who gets the call and closes the listing.

But first, let’s take a look at whom we’re dealing with.

FSBOs Sellers: arrogant penny-pinchers?

Not exactly. As for the “penny pinching,” most just do a simple calculation: if they save 5-to-7% on, say, their $300,000 home, they keep $15,000 to $21,000, and that’s big money. If all they need to do is put a sign out front and wait for the buyer to show up, that’s worth it. It’s not about being a ridiculously thrifty person; to them, it just seems like a good business decision.

Arrogant?

We don’t think so either; rather, most just aren’t aware of all the work that’s involved and the skills that are needed to successfully sell a home. The ordeal doesn’t become painful until after they decide to go it alone. Like staging, marketing, showings, inspections, appraisal issues, and negotiations. If they’re lucky or in a very hot market, the phone calls will come with scores of probing, often surprising, questions. Then they get pushed into showings at inconvenient times when you can bet the kids are screaming, the dog is barking, and the sink is full of dishes.

During the showing these unsuspecting homeowners get to hear the criticisms from strangers walking around their home like they had a right to, telling each other how tacky is that sofa and how ‘80s are vertical blinds and how the place really didn’t have any curb appeal in the first place. The FSBOs didn’t anticipate any of this, never heard of “curb appeal,” and thought that since their cousin was a real estate agent it must be really easy. So FSBO sellers aren’t arrogant about being able to handle a home sale, but usually quite naïve. How dare those strangers bad-mouth our house! Yes, it’s very personal.

Personal experience with a FSBO Flub

A few years ago, I thought that I knew so much about real estate that I’d sell my own home by myself. At this point I was not clinically insane, just on the way. How tough could it be for me who actually knew a lawyer AND a title agent to sell my own home FSBO! And I also knew what “curb appeal” meant. So up went the sign and in went the classified ads. This should be a cakewalk.

I kept score: I got 23 voice mails from realtors who said they could sell my house fast and for top dollar and 7 form letters from realtors that said they could sell my house fast and for top dollar. I took 11 calls from realtors who said, get ready, they could sell my house fast and for top dollar. I also got a call from a family who just moved here from Boise and wondered if I could do seller financing, and two other calls that said it was too expensive even though I put the price in the ad. I called my realtor and signed up gleefully.

As completely unproductive as this experience was, it was well worth it. I now knew first-hand why FSBOs resented realtors – it was all those messages and calls that said the SAME THING! I learned what agents most certainly should NOT do, and the strategies shared by top agents mirror this sentiment 100%.

Top Agent FSBO Conversion Plan

There’s a few steps to follow and you’ll have to spend a few bucks and a little bit of time. You will find that FSBO conversion occurs when you least expect it, so you won’t go through all the steps all the time.

Step One: Within a week of the FSBO entering the market:

Drop off a “Let me lend a hand” gift bag. Several of these steps include gift bags, so stock up on large-size gift bags that match the color of your brand. Always use the same color bag for a prospect, so they see you are a professional when it comes to brand awareness and marketing.

Contains:

• Quart-size bottles of Windex and Mr. Clean
• A big pack of painter’s rags
• Hand-written a note on your company stationary

DO NOT include a Business Card! If you hand-write the note on personal stationary with a company letterhead, they will figure out who you are. Also, do not put the letter in an envelope – just fold it text-side out, and stick it among the bottles.

Your note should say something like, “I know how much work goes into prepping your house for the market, so I hope these little things are useful for you or your cleaning crew. Sorry to see you leave the neighborhood, but best wishes on your next home.”

Please remember, you’re dealing with someone who’s received a barrage of Realtor calls and letters, who perhaps has a bad attitude toward agents, so NO SELLING, NO PITCHING! Use a large, grocery-size gift bag and hang it on the front door knob. ALWAYS use the same color bag and the same letterhead. This consistency also shows you’re a tenacious marketer.

Step Two: Four days later:

Deliver a “Curb Appeal” gift bag.

Contains:

• 3 yard waste bags from Lowe’s or Home Depot.
• Another hand-written note, with your name/number on letterhead, no envelope, NO business card.

This time, write the note about how curb appeal is the number one influence on a buyer’s decision, as well as a buyer’s first impression online AND in person. If you have teenage children or know some neighborhood high-schoolers you can hire inexpensively, offer to have two helpers come by the following Saturday at a specific time to help with the yardwork for one hour, such as raking the lawn and flower beds.

Ask them to text if it is NOT OK for the kids to come by during the chosen time slot. You should drop off the kids (always in a pair, and with cell phones, for safety), stay within close range, and pick them up an hour later. You’re still not ready to initiate a conversation.

Step Three: Five days later:

The “Break Time” gift bag.

Contains:

• Cookies or crackers.
• Nuts or popcorn.
• A few bottles of juice or soda.
• Third hand-written note, in exactly the same form as before.

In your note, talk about how important it is not to let their home sale become overwhelming, to be sure to take a break and enjoy what they have accomplished so far – “hang in there, it’s gonna pay off!”

Step Four: Three days later:

The “Open House” gift bag.

If the FSBO still hasn’t been sold by this point, this is a good time begin the “let me help” conversation.

Contains:

• A Market Analysis summary sheet.
• Generic Open House sign.
• Open House Tip Sheet.
• Fourth hand-written note.

The idea of this fourth touch-point is to give pointers on running an Open House, and also to let them know that you’re here to help. On the note, talk about how open houses are few and far between these days, so holding one can really make an impression. Explain that especially as a FSBO seller it may help boost interest if they conduct one (hint = they will not want to).

Do NOT run a full CMA, just a one-pager that recommends what their house should sell for. The Tip Sheet should be exhaustive, to let them know what you would do if you were going to run it.

Step Five: Three days later:

The “Call.”

If you get all the way to this Step without a conversation or a call from the homeowner, now is the time to call them. Simply ask if they’d like to meet to review where they’re at in the sales funnel so you, the realtor, might contribute any other information that might be useful.

The investment pays off

This entire process can cost upwards of $100, and for this reason very few agents have attempted something similar. You will be boosted so far above the millions of other agents calling and calling with the exact same pitch. You will not get them all – but you will get some.

FSBOs aside, if you are interested in a unique and powerful way to farm your area for listings, check out the 12-page custom publication used by top agents. It’s become known as a “secret sauce” for developing and expanding market dominance.

Good luck and, most of all, have fun!

People ask:

[sc_fs_multi_faq headline-0=”h2″ question-0=”What is a FSBO Listing?” answer-0=”For sale by owner (FSBO) is when a homeowner lists their home without the assistance of a realtor.”  headline-1=”h2″ question-1=”How do I win a FSBO?” answer-1=”There’s a few steps to follow and you’ll have to spend a few bucks and a little bit of time. You will find that FSBO conversion occurs when you least expect it, so you won’t go through all the steps all the time.” headline-2=”h2″ question-2=”Which are the steps to win a FSBO?” answer-2=”Step one: Drop off a “Let me lend a hand” gift bag. Several of these steps include gift bags, so stock up on large-size gift bags that match the color of your brand. Always use the same color bag for a prospect, so they see you are a professional when it comes to brand awareness and marketing. Step two: Deliver a “Curb Appeal” gift bag. This time, write the note about how curb appeal is the number one influence on a buyer’s decision, as well as a buyer’s first impression online AND in person. If you have teenage children or know some neighborhood high-schoolers you can hire inexpensively, offer to have two helpers come by the following Saturday at a specific time to help with the yardwork for one hour, such as raking the lawn and flower beds. Step three: The “Break Time” gift bag. In your note, talk about how important it is not to let their home sale become overwhelming, to be sure to take a break and enjoy what they have accomplished so far – “hang in there, it’s gonna pay off!” Step four: The “Open House” gift bag. If the FSBO still hasn’t been sold by this point, this is a good time begin the “let me help” conversation. Step five: The Call. If you get all the way to this Step without a conversation or a call from the homeowner, now is the time to call them. Simply ask if they’d like to meet to review where they’re at in the sales funnel so you, the realtor, might contribute any other information that might be useful. ”  count=”3″ html=”true” css_class=””]

How Real Estate Agents should measure Marketing ROI: the Right Way and the Well Intentioned Way

As Agents work to pivot and re-group, we’re seeing an influx of new agents and a resurgence of effort from existing agents. With so many realtors in the game, carefully selected marketing has become a key differentiator of the best agents. And when it comes to marketing, there have never been so many choices… so knowing what works for you in your market has never been so important.

So let’s talk marketing ROI, and why we should be a little more careful in how we analyze it.

ROI is just “return on investment.” In the real estate business, this usually refers to the amount gross profit off of marketing-generated leads (less marketing expenses) as a percentage of marketing dollars spent in the same time period. That’s:

But beware!

Oftentimes it is this very equation that causes an agent to abort good efforts in the name of “business sense.” Why? Two reasons: first, a marketing effort by itself might not work. Your marketing plan should be a concert of several different channels playing in harmony with each other, delivering a consistent, top-notch message; and second, marketing programs often need a year or more to truly build traction, especially for agents with less than 5% market share. The standard marketing ROI equation ignores these truths.

So, we’d like to offer a slightly modified ROI equation with the big caveat of be prepared to wait. For this equation, we let the marketing do its magic, then we calculate.

First, let’s define the pieces of the puzzle:

• Average customer commission. This is how much commission you earned in total last year divided by the number of sides you completed.
• Lead conversion rate. This is the percentage of leads that become customers. Do you track this? If not, take an educated guess.
• Marketing cost. This is the total cost of the marketing program you are honing into. This can be actual or anticipated and must span a specific time period. Include a percentage of staff time dedicated to helping with this type of marketing.
• Leads generated. How many leads did you receive from the marketing program you are honing into? This must be measured over the same time period as your marketing costs.

Next, you’ll want to determine your Time to Break-Even. Because so much of your marketing is intended to communicate what you’re already doing, the more active you are now, the quicker you will get results from new marketing efforts. So if this is a new plan, or one you are considering but have not yet tried, put a deadline on the break-even and discipline yourself to wait until that date before you decide to measure marketing ROI and being running calculations.

In general, your Time to Break-Even should be set based on what the industry declares, and then adjusted based your market share. It is simple to figure out your market-share:

If you’re unfamiliar with housing turnover, it is simply a measure of how often people in your target market move. If 100 homes sell in your neighborhood of 1000, your turnover rate is 10%, and there are 100 listing prospects in your area per year. Here is a great article from Joe Manusa on housing turnover.

A good baseline on any new channel, especially direct mail, is 1 year (if you are hitting your farm with quality mail at least once per month). If you have greater than 20% market share, you might expect results a little sooner, and if you have less than 5% market share, you might be waiting 2 or more years. You should also adjust your time to break-even according to the turnover in your area. If you’re marketing to 10,000 homes with a 5% turnover, you should expect to wait longer (paying more in marketing costs) than if you marketed to 5,000 homes with a 10% turnover.

Now that you have established your Time to Break-Even, here are two ways to look at your marketing efforts. The first is a way to see what the performance of efforts should look like after they have already broken even. The second is a way to “spit out” how many leads you need to generate from the marketing channel for it to pay for itself, so you can gauge how realistic the new method is. If you only need a few leads a year to make it break-even, you might adjust your Time to Break even.

Measure Marketing ROI after Break-even:

Number of Leads needed in 1 year to Break-Even:

We hope this helps as you forge ahead this year. Best of luck, and never hesitate to reach out to us here at Discover if you’d like feedback on any of your marketing decisions. Please click below to download a complimentary calculator.

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A 7-Question Litmus Test for Real Estate Marketing

Today, it’s more important than ever to market in ways that will help you stand out, and there are a million products that can make that possible. But agents need to know how to evaluate real estate marketing products; just because the product itself stands out to you does not mean it will stand out in the market.

Conferences underscore this better than anything we know of. Just browse through the rows of exhibitors at the shows such as NAR, RE/MAX, Inman, Keller Williams, Century 21, ERA, Better Homes & Gardens, on and on. Vendors know that real estate agents are always in search of the next big thing that will differentiate them from the crowd. Most of the offerings are uncannily reminiscent of the television commercial in the early days of the Internet: A young web designer is enthusiastically showing off his creation to the business client. “Look, look, music plays, it spins wildly, and then fire comes out of the top!” The client looks very disenchanted and says, “But does it update our inventory?” Alas, where’s the beef?

Successful Innovation is a very tough commodity and we don’t intend to short-sell ideas that don’t quite hit the mark. Many of these ideas are wonderful and can really help you stand apart from your competitors, even to the point of exclusivity in some cases. However, we’d like to offer a short litmus test to increase the odds that your marketing campaigns hit the mark, get you remembered, and build your listing inventory:

1. Is the product unique? Have your prospects received anything like it from competing agents?

Real estate direct mail, for example, is dominated by postcards and the occasional envelope or newsletter. Agents that want to know how to evaluate real estate marketing products for geographic farming can eliminate thousands of options with this simple question: how different it is? Will homeowners actually open, read, and engage with it?

2.Does the product have a real value, not just perceived value?

Before signing up for a new service, ask around the industry. Make sure the company has multiple case studies they are willing to provide, and multiple clients they will put you in touch with. Read Zillow or Trulia reviews on the service, if there are any. If too many agents are griping about wasted money or lackluster results, it might be best to move on.

3. Does the vendor give you the right of exclusivity to a marketing area?

Exclusive territories are of paramount importance, especially with unique marketing that an agent could not easily replicate. For example, Discover Pubs locks up clients’ ZIP Codes (even the homes in their ZIPs they actually don’t mail to, in some cases), which prevents copy-cat competitors from watering down results. Any agent in the business for a few years with a decent amount of marketshare knows that competitors do play follow the leader.

4. Can other competing agents reproduce your product easily?

Products that are complex are ideal for preventing competitors from trying to duplicate your efforts, which is important if you are fortunate enough to have an exclusive territory for an effective product. For instance, competitors are hard-pressed to write, design, print, sort, and mail their own newspaper every month, and there isn’t a second company out there that can do all that for them. There are many great examples of exclusive marketing products in real estate that are unique and hard to replicate.

5. Is the product used by other successful real estate agents?

Indeed, agents using a particular service are the best benchmarks for how to evaluate real estate marketing products offered by a company. Again, ask for case studies and references and look to see who those agents are. Have you heard of them? How big are they? How many homes do they sell? If successful agents use the product or service, and have for many years consecutively, odds are it’s working for them.

6. Do past and current users vouch for claims of achieving substantial ROI?

When checking references or reading case studies from real estate marketing service providers, look for concrete evidence of effectiveness. While results widely vary with just about every product (because agents vary so much, and not all have the best conversion systems in place), if a significant volume of users are getting substantial ROI, you should too.

7. Does the product endure over time and can you use it repeatedly with similar strong impact?

Many agents get stumped about how to evaluate real estate marketing products that are new or seem to be constantly in flux. If a product is brand new, it’s a risk – with you as the crash test dummy. And if a product is adding and subtracting features every few months, get curious about that. It may be smart innovation, but, more likely, something about it isn’t working. Products with stable histories (so long as they keep up with the times) are likely to have a stable future.

We hope you found this information useful. When you attend your next conference, think about these 7 questions and you will feel much better about availing yourself of a new marketing service.

Discover Pubs will be Lighting Up Silicon Valley with the Real Estate Elite at Inman Connect San Francisco 2017!

Inman Connect San Francisco 2017 is just around the corner. This year with be our first-ever appearance at the show, and we’re not sure what to expect – but we do know we’re going to have a ton of fun pouring wine and talking real estate with the who’s-who of the industry. Many of our clients, friends, and business associates will be attending… along with many new potential clients who are looking forward to meeting us in person.

If you are attending Inman Connect San Francisco 2017:

Friends and soon-to-be-friends: if you are planning to attend, please stop by our kiosk. We are giving out $1000 vouchers to every agent at Inman Connect San Francisco 2017. Yes, current clients can have one too! The only rule: you gotta be there. These vouchers are no joke, they are a full $1000 that can be immediately applied to any marketing package we offer – it comes off your first invoice, right away. Of course, some terms apply (that’s a lot of money!). Essentially, you have to use it by the end of the year, and it has to go toward one of the packages on our pricing page. It also can’t be used with any other types of discounts or pricing plans (like vendor packages, pre-pay discounts, or legacy “grandfathered” pricing), or on a la carte or standalone services. That’s fair enough, especially when you see how low our prices our to begin with.

This promotion is the most massive in our history. In fact, we’ve only offered 2 major promotions in the last 20 years – and neither one even half this big. We’re doing it to generate a buzz from the folks attending Inman, who we know are leaders in the real estate industry. We know once you start marketing with our custom publications and “done for you” digital marketing, you won’t look back.

How to redeem your $1000:

To redeem, stop by our kiosk in the exhibitor hall or get a voucher emailed to you by clicking Discover’s offer in your Inman Connect San Francisco 2017 Digital Goodie Bag. The voucher is good through the end of the year, and you don’t even need to begin your marketing until the middle of next year.

Enjoy a glass of wine with Gary Bowman

Inman is so cool! They arranged a cocktail hour where you take a glass and get free wine poured by 40-some sponsors, including Discover. That’s Thursday night, and one of our account executives, Gary Bowman, will be there to make sure your glass stays full. We’ve also got some neat giveaways and samples of actual client papers for you to keep. We brought samples of custom newspapers from clients who will be at the show, so you can actually talk to them about how they like their paper.

Although we’re new to Inman, we are no stranger to conferences and trade shows. We know how intimidating rows of exhibitors can be – it can feel like they all just have tentacles out. The truth is, exhibitors are just as intimidated as you are. We don’t want to say or do anything to lose your trust, and we know full well you aren’t in a position to sign up for new services at a conference. I hope all the sponsors at Inman understand that too – we think they do. Many reputable companies are going and they should treat you with the utmost respect – in fact, Inman trains sponsors on “booth etiquette.” Even so, especially during the cocktail hour, be prepared to think critically about the products and services being offered. Here’s an article we wrote recently about 7 questions every agent should ask of a marketing product or service they are considering.

Hope to see you there!

We hope you enjoy the amazing lineup of speakers and events. It’s going to be a wonderful, educational, and motivating conference. If you’re going, comment on our Facebook page or shoot us an email so we can make plans to meet up!

Happy Conferencing!

In most parts of the country things are pretty good in the real estate market, but many of us know that the biz is very susceptible to dramatic cycles and shifts in conditions. Since we’re not unusually stressed-out, this may be a good time to take a look back and be prepared to handle the next Big Party-Pooper.

Most of you won’t remember 1980 when the prime rate hit its all-time high of 20.5% and stayed close to that for over a year. Paul Volcker was the Chairman of the Federal Reserve Board and would not budge even though thousands of influential business people, including President Carter, were begging him to lower the rate and forget about inflation.

Sorry, We’re Out to Stem Inflation

During that era interest rates for real estate mortgages hovered around 18%. That’s right, 18%! How many houses do you think you could sell when the monthly payment for an 80% loan-to-value, 30 year, $300,000 home would be $3,600/mo for just principal and interest! How many folks who needed a home in that price range could qualify? The real estate market, obviously, suffered long and hard.

I remember meeting my Dad at Rax Roast Beef in Oberlin right around then. He had lived through the Great Depression of the ‘30s and had lots of battle scars from growing a manufacturing business and raising eleven children with Eastern European appetites. I needed some sage advice and Stress Relief from a member of The Greatest Generation at that moment, when real estate was slower than a snail crossing a peanut butter patch.

“How did you get through it, Dad, with 35% unemployment, bread lines, soup kitchens, boarded-up foreclosures – how did you get contracts, keep the business going?”

The Secret

He smiled and slowly nodded, and I was pretty sure that he was rather proud of himself and others like him. He took one of his famous dramatic pauses and had a couple curly fries, then said, “The secret is simple: Life does not stop. Wheels keep turning. People still bought Buicks, they just didn’t buy as many of them. The business is still there, you just need to be a lot more clever and work a lot harder than the next guy.” If you look at the picture above, it’s of an ad for a brand new Buick model… in 1932, the depth of the Great Depression.

Just as my Dad predicted, the world did not stop spinning, some people were very clever and did work harder, and the lending industry came up with a thing of beauty: the Adjustable Rate Mortgage aka Variable Rate Mortgage. At first, the specter of ginormous payments down the road scared a lot of people. It was hard to live with the threat of an unaffordable payment when the rates adjusted incrementally upward, usually after 1, 3, and 5 years. But cool heads prevail: we explained that, theoretically, there was no need for these instruments to lead to panic and foreclosure because, if we really had faith that the US economy would correct itself, our buyers could refinance a few years later and have normal, level payments that were truly affordable. And that’s just the way it played out, a proverbial win-win for the borrower and the lender.

You may be wondering if I didn’t know about what happened in the real estate market during the Crash of the 2007 to think that ARMs were actually good things. No, it’s just that ARMs only work if the borrowers are actually financially qualified, unlike the foolishness of government-backed loans to folks who were not.

So enjoy the good real estate climate but be open to innovation in these times of shifting sands – we’ll have to be clever and work hard to adjust to changing lifestyles, demographics, global economic conditions, and a host of other influences on our industry.

Episode 2: “The Price was Actually Right”

Ahh, pricing. It usually isn’t a big deal to get clients on board with a list price that will effectively sell their home… but, sometimes it is. In this episode, Leo shares personal experience with pricing a client’s home in Georgia too high.

Interestingly, this happened during market conditions similar to today. Prices were up, inventory down, and sellers were expecting to cash in on all the excitement. Sellers watched their uncle’s, cousin’s, and babysitter’s mom’s houses sell for crazy prices. Then they saw their neighbors’ homes go on the market for what would be 30% appreciation in a 4 year period. So, when they went to list their home, they expected to get their neighbor’s list price.

But we all know it doesn’t work that way. In a fanatical pricing craze, less experienced agents throw up inflated list prices with high hopes, and even though properties are selling like chicken fingers, those homes are not. They are lingering and serious agents eventually stop showing them and buyers are too intimidated to make an offer. Those homes end up expiring and going to another agent at a 20% price reduction. We get it, we know you’ve had to try to explain this to a client who absolutely insists on over-pricing their home. Let us know how you’ve handled it!

Enjoy our latest video, and be sure to subscribe to our YouTube channel and Facebook page for the latest news, content, and updates. Happy marketing!