FSBOs: Rebranding DIY
FSBOs: Rebranding DIY
It should come as no surprise that some people consider selling their home on their own. Americans are big do-it-yourselfers. There’s even a TV network devoted to do-it- yourself projects. As a culture we’re also fascinated with the law. (There’s a TV network for that, too.) But we know it’s almost always a bad idea to represent oneself in a legal proceeding. This cultural knowledge formed the basis for a new approach to FSBOs adopted by our local association, the Walla Walla (Wash.) Board of REALTORS®.
The paradigm shift
Several years ago, a young couple in our town started a Web site for homeowners who wanted to sell their homes on their own. At the same time, the local paper published a scathing article against real estate practitioners and the industry in general, promoting the new Web-based, do-it-yourself model for selling real estate.
Rather than get into a head-to-head battle with FSBO proponents, the Walla Walla board took a proactive, nonadversarial approach. The cornerstone of that proactive campaign was a paradigm shift: We would no longer support the brand names FSBO or For Sale By Owner. Making that decision forced us to take a fresh look at sellers who opt not to use a salesperson.
Practitioners and clients commonly use the term FSBO as if it were a brand name. But by using the term, we inadvertently promote the brand. It’s akin to an announcer at Wal-Mart talking about how much lower prices are there than at Kmart. Even though we probably wouldn’t pay a lot of attention to the announcement, the Kmart brand wends its way into our subconscious. The same is true for the term FSBO. Every time we use it, the term burrows into consumers’ psyche a bit more.
In theory, every home is for sale by owner because the homeowner holds title. Practitioners essentially facilitate the transaction. The only time this isn’t true is in the case of a person representing an estate or someone with power of attorney. Therefore, we practitioners can come across as slightly arrogant to sellers when we seek to take responsibility for selling their homes.
Once we move beyond the notion that our job is to sell homes, we’re left with a twofold business purpose: representation and marketing. Thanks to this analysis, we came up with a nonadversarial term for FSBOs: unrepresented sellers.
A pervasive change
Les Griffith, a sales associate with Windermere Real Estate in Walla Walla, uses the term unrepresented seller during his listing presentations. In doing so, he says he can see a change in prospective sellers’ expressions as they think about the consequences of self-representation. “You can see the light go on,” Griffith says.
Consider this conversation Griffith had with a consumer: The person told Griffith he had bought and sold real estate many times without representation. He mentioned that in his most recent purchase, the seller was also a FSBO. During the conversation, Griffith used the term unrepresented seller. The person came to realize that both parties in that transaction had no representation. Soon after, Griffith got a commitment from that person to use him in all future transactions.
“It’s changed the way I think,” Griffith says. “I used to have an adversarial attitude toward owners who refused to use a practitioner. Now I feel more empathetic. They’re choosing to go it alone in a tough industry.”
Building your case
To have a broad impact, rebranding requires more than lip service. Doug Simcock, the broker-owner at Windermere in Walla Walla, changed the title on the company’s “For Sale By Owner Commission Agreement” to “Unrepresented Seller Commission Agreement.” When his salespeople—working as buyer’s agents—present the document to sellers, it underscores the fact that the buyers have representation but that the sellers are going it alone.
To further strengthen your argument to FSBOs, use hard data to demonstrate the risks sellers face when forgoing representation. For example, NAR’s 2004 Profile of Homebuyers and Sellers report shows the median sales price for sellers working with a salesperson was $189,000 compared with $163,800 for unrepresented sellers. So in addition to exposing themselves to potential liability issues, unrepresented sellers may be leaving money on the table, even after accounting for the seller agent’s commission.
Also be sure to emphasize to unrepresented sellers the areas where you can be especially helpful. The same report found that the most difficult tasks for FSBOs were “getting the price right” and “preparing/fixing up home for sale,” each cited by about a quarter (24 percent) of the unrepresented sellers surveyed. “Understanding and completing paperwork” was cited by 22 percent.
The Walla Walla board’s rebranding approach is spreading to other parts of Washington state thanks to articles published in the Windermere company newsletter and the state association’s quarterly newsletter. The feedback from practitioners generally has been good, with several reporting a positive impact on their business.
We owe it to our clients and customers, ourselves, and the industry to change the way we think and speak about unrepresented sellers. Try changing the words you use. You’ll be surprised by the results.