Calling FSBO offering free listing and open house to capture buys

Member since 2019 · 11 posts · 1 vote

What do you guys think about offering free listing and open house to FSBOs in order to hold open houses to capture buyer clients? Then during the open house offer to do an open listing agreement where they don’t pay if you don’t find them the buyer.

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John Barrows

Real Estate Broker · Auburn, WA · Member since 2015 · 151 posts · 106 votes

Golly, I almost threw up my cookies just reading this post. Everything is wrong about this post!

1. Where is your broker? As a Managing Broker and If I see this I will fire you or send your license back to the state. I see NONE of this is approved by your broker. WOW....I believe in most states this would be considered false and misleading advertising.

2. Giving the seller an OPEN LISTING is stating you're willing to work for free or your services are worthless.

I have nothing else to say, makes me shake my head in disbelief......

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Edgar Butler
Real Estate Agent · Metro Detroit, MI · Member since 2019 · 19 posts · 12 votes
6y
I like it, I also like the approach of trying to be their buyers agent for their next house, rather than trying to get the listing as well.
Inevitably when it is time to call a realtor to list, they will want to go with the guy who offered to help them for free, and they will work with to purchase their next home.
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Tamara Deering
Real Estate Agent · Austin, TX · Member since 2019 · 235 posts · 194 votes
6y
I'm not sure where you are located but you need to make sure that an open listing is ok with your association. Also, does your broker allow you to offer a 0% listing? If they don't I wouldn't make that offer to the seller, and changing it to a open listing at the open house sounds like a bait and switch.
You would probably be better off just offering to hold an open house at the FSBO and then marketing the property with your fee added to the buyer side. Again, you need to check the logistics and ethics of this arrangement with your association. I see all sorts of complexities here surrounding who you represent - in this scenario it seems like you are representing yourself.
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Brad Bellstedt
Real Estate Agent · Las Vegas, NV · Member since 2017 · 279 posts · 133 votes
6y
Sounds like a great way to devalue your services and for no money. There are MANY properties listed in the MLS by agents who will let you borrow their listing to host open houses. (I do this exact same thing 48 weeks a year) You'll get the same results with much less effort. Don't give away services for free to FSBO's.
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John Barrows
Real Estate Broker · Auburn, WA · Member since 2015 · 151 posts · 106 votes
6y
Golly, I almost threw up my cookies just reading this post. Everything is wrong about this post!
1. Where is your broker? As a Managing Broker and If I see this I will fire you or send your license back to the state. I see NONE of this is approved by your broker. WOW....I believe in most states this would be considered false and misleading advertising.
2. Giving the seller an OPEN LISTING is stating you're willing to work for free or your services are worthless.
I have nothing else to say, makes me shake my head in disbelief......
4 Reply
Andre I.
OP
Member since 2019 · 11 posts · 1 vote
6y
@John Barrows I don't think free trials are considered false and misleading advertising but in this case I might be wrong since you're a broker and I'm an agent. I plan on running it by my broker first. I'm just thinking about ideas to get more clients. I see agents all the time offering to preview the home and saying that they have a buyer. I consider that false and misleading. I do agree with you that open listings are far from ideal, but there is a reason why they are selling on their own and I want to offer them a way to list with me without feeling pressured. What do you recommend for lead gen? Someone mentioned hosting open houses for other agents in the area. What do you think about that idea? What do successful agents in your experience do to lead gen? I plan on letting the homeowners know when I meet then that according to the National Association of Realtors homes that sell for $200,000 FSBO sell for $265,000 with a realtor and that's would more than cover my commission an open listing wouldn't stop them from selling it themselves, I would just be putting more money in their pockets to consider an open listing with me. What do you see wrong with the idea and how would you improve it?
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Andre I.
OP
Member since 2019 · 11 posts · 1 vote
6y
@Brad Bellstedt thanks for the idea I think it’s actually better than mines. I will try that with the $600k plus price range and see if I can get leads from it. I will run it by my broker and see what they say. I’m scared that I will be working for free, but like you mentioned referral websites, Zillow, and Realtor leads aren’t worth anything with the amount of leads that you need to make a sale it’s too expensive to make a profit. I’ve tried Facebook marketing and haven’t had any success. Door knocking doesn’t work because it’s not concentrated towards someone that has a need for something. My bread and butter in sales has always been the phone with a targeted calling list and making them feel comfortable to do business with me, that’s why I wanted to try that approach. I hope it works and thanks again!
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Andre I.
OP
Member since 2019 · 11 posts · 1 vote
6y
@Tamara Deering I will have to talk to a lawyer about what I can and can’t do.
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Andre I.
OP
Member since 2019 · 11 posts · 1 vote
6y
@Edgar Butler I will talk to my broker and try different approaches and sees what works. Thanks for the feedback!
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Jonathan GreeneBusiness Member
Real Estate Consultant · Madison, NJ · Member since 2016 · 6k+ posts · 7k+ votes
6y
FSBOs are FSBOs for a reason. They don't want to deal with agents at all unless they are bringing a verified buyer and they probably still won't pay a commission. FSBOs are the biggest waste of time for agents in the history of the world. They are always overpriced and they are wise to the games like holding an Open House. They can do that themselves. Agents just want to get leads and how does that help them? Sure they get more feet in the door, but they are FSBO because they don't want high traffic and Open Houses. Come up with something novel if you want to approach a FSBO. This bad strategy has existed since the first land settler put out their For Sale By Owner sign on their plot.
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Andre I.
OP
Member since 2019 · 11 posts · 1 vote
6y
@Jonathan Greene what do you recommend as a way to approach them? I thought about the fact that they are not interested in dealing with an agent and came up with the solution of hosting free open house. Another strategy is mentioning the fact that homes sell for considerably more with a realtor according to the National Association of Realtors. Also, approaching them with an open listing agreement to overcome their fear of losing out on money if they sold it themselves. That’s all I have for right now.
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Patrick J.
Rental Property Investor · Tucson, AZ · Member since 2019 · 173 posts · 87 votes
6y
@Andre I.
- Tell them that youll put a clause in the contract that allows them to end the listing agreement every 30 days if they don't believe you're doing a great job. This also works for Expireds who don't want 6 or 12 month contracts.
- Offer something of value like taking professional photos for free. Then when they decide to choose an agent, they will go with the person who gave them something for free. It's the law of reciprocity. You'll stand out because you'll be different from the other 20 agents who call them and repeat the same sales scripts. The statistic is that 95% of FSBOs end up choosing an agent and the reason isn't because real estate is difficult to sell. A 5 year old can take some pictures, put a price and list it on the MLS and get lucky.
The reason FSBOs cant sell is because no buyers agent wants to deal with FSBOs. Why would any buyers agent want to deal with a FSBO unless the FSBO offered a higher than 3% commission?? Agents are always looking to take take take without ever offering something first.
- With that being said, if you don't have markering capital, then it's going to be harder to succeed. Having a complimentary business that makes easy money to leverage that capital into marketing your real estate business makes getting clients easier. I'm talking about finding a geographic farm area of about 500-1000 homes that is not dominated by other agents and has a 6% turnover of sellers. Once you find that geographic area, I would spend 5-10 thousand dollars in a year marketing to that area. No other agent is farming in that area so they will only remember your face when you direct mail them twice a month, circle prospect them and hand business cards on their doors.
Direct mail is expensive so if you want to avoid the costs of direct mail, I would find a farm area of 500-1000 homes and pass out business cards or some marketing material of value 2 times a month. It's going to take you spending 10 or more hours just going door to door for the whole year. That's how you get business. People who sit behind computers and post Instagram posts for 2 likes are the ones who quit the business within 2 years.
If you're not willing to go door to door and get your face out there in a farm area, then just quit. It takes courage to do what the 90% of quitters in real estate don't do.
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Patrick J.
Rental Property Investor · Tucson, AZ · Member since 2019 · 173 posts · 87 votes
6y
@Andre I.
And I agree with others in that there's a fine line between providing no value and providing too much value.
Listing their home on the MLS for free is just ridiculous. That's way too much and not worth it. Taking a few pictures for them and holding open houses for them is just enough value.
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John Barrows
Real Estate Broker · Auburn, WA · Member since 2015 · 151 posts · 106 votes
6y
Andre,
You need to speak to your DESIGNATED BROKER, have any and all ideas reviewed and approved by your DESIGNATED BROKER before pursuing ANYTHING IN REAL ESTATE!
Not once in your post did you say, I DISCLOSED to the FSBO exactly what I was going to do and how I was going to attain my goals. "offering free listing and open house to FSBOs in order to hold open houses to capture buyer clients"? I imagine this FSBO is going to let you USE THEIR HOUSE to BATE UNSUSPECTING BUYERS for your own gain? Hmmmmm, what's wrong with that picture? Why not just get the FSBO SUED for being involved with this scheme once something goes wrong in the dealings with you. You certainly don't understand the liability you are projecting on the UNSUSPECTING FSBO and UNSUSPECTING BUYERS!
GO TALK TO YOUR DESIGNATED BROKER!
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