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Even as unsavory as housing marketing, converting for sale by owners (also known as FSBOs or “Fizzbos”) referral sources is still an effective marketing strategy. Don’t make the mistake of thinking that you’re only going for the opportunity to help Fizzbo get a purchase loan for his new home. The real goal is to develop a relationship with the homeowner so that you can prequalify all potential buyer prospects interested in their home for sale. Using a phone script would make this even easier.
Drive around your area and find all the homes that are being sold “For Sale By Owner”. And if your field is like mine, there should be a lot of them. When you find one, write down the address, phone number, and sale price, if it’s available (if they have a flyer, even better).
Once you’ve gathered several addresses and phone numbers, it’s time to make phone calls. Because FSBOs are highly targeted by real estate agents, the homeowner will probably be very resistant to your phone calls. You need to break that resistance as soon as possible. And the best way to do that is to let them know upfront that you’re not trying to get their money. Once they know that none of their money is at risk, they will be more open to talking to you. Here’s the script to use:
FSBO: Hello?
you hi. Are you selling the beautiful home at 15 Oak Street?
FSBO: Yes I am. Who am I talking to?
You: My name is Ken Johnson from ABC Mortgage and I was wondering what is your selling price on the home? Oh, and what’s your name by the way?
At this point, Fizzbo will be slightly taken aback. His resistance is still high because he knows you’re from a mortgage company, but you haven’t said anything yet to get him hung up on you.
FSBO: Well, my name is Bob and I want to get $200,000 for this. Now, why are you calling me?
You: Bob, I can hear the excitement in your voice, and I can probably guess why it’s there. Since you put up the for sale sign in your yard, you are likely to be bombarded with calls from real estate agents who want you to list your home with them. I can promise you that I am not calling about this.
FSBO: Really? Then why are you calling?
You: I want to build a win-win partnership with you. One of this you sell your home quickly and with very little stress, and you don’t have to pay me a dime.
FSBO: Well, I’ll do any way I can to help sell this house fast. But what’s in it for you?
You: Typically, a home receives interest from dozens of potential buyers during the time it’s listed for sale. Almost all potential customers will not buy that particular home. But they still want to buy a home and probably need financing to make it happen. It’s the buyer prospects I want to get business from.
FSBO: OK, I see. But then how will you help me?
You: I’m glad you asked. Did you know that when it comes to selling a “For Sale By Owner” home, most transactions are never completed? Were you aware about this?
FSBO: No, I wasn’t. Why so?
You: The number one reason those transactions never get to the closing table is because the financing was not set up properly by the buyers. So they’ll look at homes they can’t afford (because they haven’t been pre-qualified by a mortgage professional) and then go on to make offers. This results in a lot of wasted time (and a lot of stress) for the homeowner.
FSBO: So you’ll help me by prequalifying buyers interested in my home?
perfect you! By allowing me to prequalify them (at absolutely no cost to you), you will only be dealing with prospects who are financially capable of buying your home. In addition to weeding out all the buyers who might not buy your home anyway, the prequalifying process eliminates prospects who are merely “looking.” You know, the ones who are always driving around looking at homes for sale but never intend to buy them.
FSBO: Wow. So you’ll do that prequalifying for me, and I don’t have to pay you anything?
You: No. Not a penny I will make my commission on behalf of the buyers. Is this win-win situation a good idea for you?
FSBO: Yes it does. What is the next step?
Once you have the FSBO onboard, everything else becomes easier. Each FSBO relationship you establish should be able to provide you with several buyer prospects. Having a few FSBO partnerships will generate a steady stream of purchase mortgage leads. And because the time to maintain them is minimal (it’s basically just prequalifying prospects once your partnership is formed), you can have multiple partnerships running at once. Just remember that they don’t want to take any of their money, and they’ll be more willing to work with you.
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