Why would you? Two most common answers: "So they see how hard I'm working...and eventually list with me." and "To get buyers."
Why you should not do open houses for buyers:
1. It tells them you don't have anything else to do...so you're willing to work for free. Which is perfect when you don't value your time.
2. It trains them NOT to hire you. (Why should they? You're already working for them for free.) .
3. It's a B.S. approach to getting a listing (acting like you're helping them sell, when your motivation is to get the listing.)
4. It keeps you busy, but rarely gets you paid. If you're genuinely just trying to get buyers...how's that working out? FSBO buyers are typically bargain hunters or unqualified...that's why they go to FSBO's...so they are a very low-quality lead that will typically take tons of time and often never buy.
Learn how to convince FSBOs to hire you. Why should they hire you? BECAUSE you can help them get a better result. (More money in Less time with Less Hassle)
If you don't know how to do that, Come join me and hundreds of other agents at FX Extreme Training Camp.
You're actually training them not to hire you. Why should they hire you? You're already working for them for free. So one of the great questions that I get occasionally on Facebook or on YouTube is, should I hold open houses, for sale by owners?
So you've got somebody trying to sell their house on their own without using a real estate agent. And the question is, should I help them?
Should I do open houses for them? And a lot of trainers out there and a lot of brokers and coaches and managers say, yeah, go out there, help them do it. I say you shouldn't. I say it is a huge mistake. And in this video, I'm going to explain to you why it is a huge mistake and why you should never do it. And then talk about what is a better approach. So let's talk about this, should I hold open houses for, for sale by owner? So my first question that I have to ask is, why? Why would you do that? Why would you hold an open house for somebody who's not going to pay you and who does not want to pay you?
I'm like, why does that make sense? Well normally I get two answers when I ask the question, and all the times that I've heard somebody say you should do it and heard trainers say, this is a great strategy is that it gets your foot in the door. And it is, it's just a bad strategy. So first, the two answers I get commonly are so they can see how hard I'm working for them. When they see how hard I'm working and they see me working for them for free, they'll get to like me and they'll trust me. And if they eventually decide to hire an agent, then they'll hire me.
And the second reason is because want the buyers. So buyers come in, they're probably not going to buy the for sale by owner's house, but I may get a buyer out of it. And so I'll do it to get buyers. All right, so those are the main two reasons. If you have another reason for holding a for sale by owner, an open house for a for sale by owner, please post it in the comments below so I know what you're thinking and I can answer it.
The answer to the question, should I hold open houses for, for sale by owners is no, and here are four reasons why it is bad business. Why it's bad for your success, it's bad for what you're trying to do because you're trying to either get the for sale by owner to want to hire you. You're trying to get in with them, get your foot in the door. Or you're just trying to get buyers. So number one, what are you telling them about how good you are? Well you're telling them you have no business. You're telling them, I've got nothing else to do. I've got nothing better to do on weekends so I'm willing to work for free.
Now this works perfect and it's a perfect strategy if you don't value your time. And if you've got nothing else better to do, why not? Well why not? Because it's bad for other reasons. But number one, is you're immediately communicating to the for sale by owner I really don't have any business of my own. I don't have anything to make me money, so I'm just going to work for you for free. So it would make a for sale by owner go like, why are they working for me for free? They're really not that bright. That's what my friend for sale by owner is thinking about you. Second reason why holding an open house for a for sale by owner is a huge mistake, and it's this. You're actually training them not to hire you.
Why should they hire you? You're already working for them for free. You see, you think you've got a whole bunch more of value you could bring to them if they actually listed with you. And you're just showing them a sampling. But what they're looking at is, well this person if they had a buyer they would bring them. No brainer. So why should I list with them? They're already working for me. They already know about my house. Why in the world would I list with them and they're actually trying to sell my house for me already and they're doing it for no commission.
So you're actually training them to do the very thing that you probably want them to do and that is I'm hoping that if I get my foot in the door and I show them how hard I'm working for them that they'll eventually list with me. And you're actually training them to do just the opposite.
Number three, the third reason why holding a for sale by owner open house is a mistake is because it's total BS. If your motivation ... Because see, I happen to believe that why you do what you do is as important as what you're actually doing. If your motivation for doing it is to get the listing, and you're doing it by pretending to help them, it's just a tactic.
And I'm really just acting like because you know that you're probably not going to sell their house. You don't want to sell their house. Why would you do it for free? So you're not actually trying to do something that is in their best interest. You're actually trying to do something for your best interest, for your benefit, which is get a listing and that's just total BS. You're acting like you're helping them when your motivation is to get a listing. It's a bait and switch. I'm baiting them with this activity, but the switch is that I'll switch them to get a listing.
BS my friends. And it's one of the reasons that our industry has such a bad reputation with people. Is because we'll actually stoop to those kind of BS tactics. Just think about it. Think about, I know you've had people that you respect and people that you like and maybe told you this is a great strategy. But think about what I'm saying and going, is this really a great professional strategy? Or is this a strategy for somebody that doesn't have anything better to do and they're scraping the bottom of the barrel trying to get business?
Now hang with me here because in a minute I'm going to give you the solution for well if I don't do this, how do I get for sale by owner listings, how do I get business? I'm going to get to that. But for right now, I just want you to understand why it's a mistake.
Number four, the fourth reason that it's a mistake to hold an open house for a for sale by owner is that if your motivation is to get buyers, it is a great way to get you busy, but it is a bad way to get you business.
In other words, if you want to use your weekends to hold an open house for a for sale by owner, it will probably keep you buys for the weekend, but it will rarely get you paid. See, if you're genuinely trying to get buyers, how's it working out holding open houses for for sale by owners? Who do you know out there that's actually making a lot of money by holding open houses for, for sale by owners? And the answer is, none. You see, if you're looking for buyers, this is the worst buyers to look for.
A couple of reasons. Number one, why do buyers go to a for sale by owner to begin with? Well number one, mainly because either they are bargain hunters and they know that this for sale by owner is not having to pay a commission. So we can get a better deal on this house because it's a for sale by owner. So we're looking for that cheap deal. Okay, that's going to be a buyer who doesn't want to work with you as there agent. They already have said we are skipping the agents. So they're less likely to either want to work with you to begin with. And number two, the main reason that people will go to a for sale by owner instead of going to a house that's listed with a real estate agent, as a buyer, it's because they can't buy a house. They're not actually qualified to buy a house.
And so if you have prospected and talked to a lot of for sale by owners like I have, for years I've listed and sold hundreds and hundreds of for sale by owners. What you'll discover is one of the biggest problems that for sale by owners have is that the buyers they attract, a lot of times and they'll say this. You'll hear the for sale by owner they're asking me if I'll owner finance it for them? Or they want to do a lease to own. A lease option. Well the reason is is because they can't actually qualify to get a mortgage to buy a house. They don't have money, they don't have a job.
They don't have good credit. And that's why they're not working with an agent because an agent won't work with them because an agent knows they can't qualify for a house. So they're going to a for sale by owner hoping they can figure out a way to kind of talk the seller into financing it for them or letting them rent it and then buy it later. In other words, the kind of buyers that get attracted to a for sale by owner's open house typically are a very low quality buyer lead. Now even high quality buyer leads take a lot of time. They take a lot of effort. And a lot of them aren't going to actually buy a house with you.
And now you're talking about going after the lowest life form on the real estate food chain and saying okay, I'm going to get business there. My friends, if you're going to spend three or four hours trying to generate business, there are way more effective and more productive strategies than holding an open house for a for sale by owner. And if you're trying to get a listing from a for sale by owner, there is an insanely more effective strategy than by pretending to help them by holding open houses for them.
So what's the solution? What is the solution what do I do if I want to get a listing, if I want a for sale by owners, if I'm trying to build a business, what is the solution? Here's the solution. Learn how to convince a for sale by owner to actually hire you. To actually let you list their house and sell it for top dollar. That's the solution.
Because here is the fact. Let me go ask a question, why should they hire you? Why should they hire you when you come and talk to them? And here's why. Because if you know what to do and how to do as a real estate professional, you can get them a better price. You can get them a better result in three ways.
Number one, you can get them more money.
Number two is you can get their home sold for faster and number three you can do it with less hassle because you take care of everything for them. You can actually deliver a better result for a for sale by owner than they can for themselves. And almost every time you can help them net as much or more money in their pocket than they could do by themselves. See here's one of the reasons that we have all these like BS strategies for for sale by owners. And that is we actually believe the for sale by owner's story. The for sale by owner's story is, is if you're a real estate agent, you're going to cost me money. You're going to be an expense to me because I have to pay you a commission and they think that commission paid is actually money coming out of their bottom line pocket.
And the reality is, if you know what to do to get a home sold for top dollar, you can actually net them as much or more money as they can by doing it themselves. Why? Because you can get them better exposure to a better quality of buyer, in a better amount of time to get their property sold for top dollar. And when you do that you're going to get better quality offers, which means more money. And even after commissions and everything, and they're almost always willing to pay half the commission already, right? I'll pay you a buyer's agent commission most of the time. So you only have to add the extra value is for the listing side of it.
If you can help them get an extra 5% compared to what they could do it for themselves, it's a break even. Or 6%, it's a break even. And that's almost always, always ... And they're already willing to give 3% away. So all you've got to do is actually justify an extra 3%. And my friend, you can do that. Now if you're going, but I don't know how. What do I say? How do I approach them and all that kind of stuff. That is what I train. And if you want to learn how to master listing and selling for sale by owners, and literally how do you get a listing appointment on the very first conversation with a for sale by owner?
Because I did it all the time. 20% of the for sale by owners I could talk to that I talked to I could get a listing appointment on the very first conversation and you can too. You just have to master what to do. How to approach it, what to say and how to say it. And that's what I train at my FX extreme training camp. FX stands for F for sale by owners, X for expires. It is the best training in the world on mastering listing and selling for sale by owners and listing and selling expired listings in high volume.
And in the link below is the registration page for our FX Extreme training camp that's coming up in Los Angeles this summer. Make sure you click on the link below. And if you want to master listing and selling for sale by owners, listing and selling expires. In fact we're also going to be talking about how to get probate listings and sell them and how to get distressed sellers and short sells, NOD's and list and sell their properties. We're going to be training all of that this year at FX extreme training camp. You can click on the link in the description of the video and go there and it'll tell you all about it.
Get your ticket and come join me in Los Angeles for FX extreme training camp. It's three days. We're going to be training personally with me on how to master these guys instead of wasting your time trying to figure out some strategy of holding an open house for a for sale by owner. There's a much better way my friend. If you have any questions or thoughts, post them down below. If you have any challenges, if you disagree with this, post it down below. I'd love to hear your comments so that we can carry on this conversation. If the video's helped you, make sure you give it a thumbs up. Go check out FX Extreme training camp and I look forward to seeing you in June in Los Angeles.