Home Flippers and FSBOs: Why They Need You on Their Crew
May 17, 2021

Home Flippers and FSBOs:  Why They Need You on Their Crew 

Powerfact: Working with home-flippers/FSBOs takes business communication skills. They’re not your average FSBO.

By Real Estate Coach and Speaker Darryl Davis, CSP

Whether or not you are one of the many real estate professionals who have worked with a “home-flipper” during your tenure in real estate, the unique combination of Flipper/FSBO needs the expertise of a real estate professional more than ever.  They just might not know it yet. They might think it’s smart to “save the commission” and the house will sell itself in this marketSound familiar? 

Understand First What Makes This FSBO Different

That’s because a home-flipper doesn’t think like a regular FSBO.  They are usually a business-minded investor, and as such, they aren’t selling with emotion like most sellers.  Instead, they are all about bottom line return on investment, and trying to determine the best business strategy for getting the most from the house with the least investment in.  They usually need need a network of people to work with that they both like and trust, including a plumber, electrician, HVAC technician, and several other tradespeople to renovate the home and prepare it for market. If they’re wise, they realize that part of a home-flipper’s work is marketing and selling the home when the renovation work is finished and that’s where a smart Flipper/FSBO needs a real estate professional on their crew! 

Loved this article we found, Don’t Quit Your Day Job: 10 Tips for Wannabe House Flippers, it’s a great one to tuck into your objection handling kit.

Why the FSBO Needs You 

Yes, the market is hot right now, but it’s hot because the real estate agents are making it hotFor-Sale-By-Owners, historically end up getting far less for their home by selling on their own. In fact, statistics from the National Association of REALTORS® Profile of Home Buyers and Sellers states…

The typical FSBO home sold for $217,900 compared to $295,000 for agent-assisted home sales. 

Even with existing home inventory historically low, 90% of homes are still being sold through real estate agents. Why? Because selling a house is so much more than just finding a buyer, and more than ever sellers need a strong listing agent to lead negotiations in multiple offer situation. It’s not just about finding a buyer. It’s about finding the right buyer. Protecting the seller’s interests both in terms of investment and legally.

The Attorney Analogy 

You may have heard me use the Attorney analogy before, and it’s as true today as it ever wasIf you were going to be sued by someone, would you go to court without an attorney? No, you would hire someone! But, let’s say you did go to court, deciding to represent yourself because you used to watch Matlock or Law and Order, and it doesn’t look that hard. 

It’s a bad move. That old saying, “A lawyer who represents himself has a fool for client,” is still accurate.

This what the home-flipper is doing by not having a professional real estate agent in his crew. When he goes to sell the home himself, every agent that he deals with is going to be 100% looking out for the buyer’s best interests, not his own. What he is doing, as a FSBO, is paying a licensed, trained, real estate agent to work against him! 

If a FSBO is willing to pay a portion of the commission to someone else that’s working against him, why wouldn’t he pay that other half to you so that he could have a licensed, trained real estate professional looking out for HIS interests? It’s short sighted. 

Other Considerations 

Then, there is the matter of this hot market – you might not have just ONE buyer…this home-flipper might find himself in a multiple offer scenario. He would need to look beyond the dollar signs and vet all the potential buyers himself to make sure they can even afford his home. But what happens if he misses something? What happens if he gets tied up in contract with someone who couldn’t afford the house if it were free?  

Here’s a scenario: What if he agrees to pay an agent 3% if they bring him a buyerand an agent does that and brings a buyer who is ready, willing, and able, to purchase. That agent has now earned their commission. Now, what if, hypothetically, this Flipper/FSBO gets two agents that bring him full-price offers? Legally, he now owes TWO commissions, not one! In this hot market, he could potentially owe multiple commissions, and legally be on the hook for every one of them. 

These real estate agents could easily put a mechanic’s lien against the property to make sure they all get paid. (Back to that attorney analogy – when a FSBO represent themselves, they have a fool for a client!) They will have nobody looking out for their best interests, and the legalities alone could land them in hot water. Most FSBO’s don’t realize this, and this is the reason they need us more than ever.  

What’s Next? 

Are you ready to start taking things to the Next Level®Whether you are working with a FSBO, home-flipper, or motivated seller, communicating the great value that you provide by looking out for their best interests is vital! 

Power Agents®, you’ll find lots of tools to develop your skills in handling any and all objections in the Objection Handling section of the Classroom. Including this customizable Multiple-Offer Negotiation eGuide and an all-new Multiple-Offer tracking Spreadsheet!  You have all the tools and skill development that you need to feel confident in presenting exactly why sellers need you on their team! 




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