FRBO Prospecting Script: Your Key to Working with Investors & Landlords
Have you heard of FRBOs? A lot of agents haven’t, which is why they’re such a lucrative lead type in an otherwise overcrowded prospecting market. In this article, we’re going to teach you what FRBOs are, why they’re an amazing lead source, and how to have successful conversations that can lead to a lifetime of new listings.
What to know about FRBOs…
FRBO (For-Rent-By-Owner) leads are an amazing opportunity for real estate agents to build relationships
with investors and landlords. Most FRBOs fall into one of four categories:
- Landlords with vacant rental properties who are stuck paying out-of-pocket for their mortgage or property taxes.
- Owners by default with a property due to circumstance (like an inheritance) and may be renting or attempting to rent the property but would rather cash out.
- Active investors who are looking to buy or exchange an investment property to expand or diversify their portfolio.
- Reluctant liquidators who would cash out, but often don’t for fear of capital gains tax.
Unlike Expired or FSBO Leads (who are often combative), FRBOs are usually less attached to their property and are more willing to talk to an agent. They also tend to be business-savvy individuals who understand real estate terminology and appreciate the value of a long-term professional relationship. In fact, many agents have reported taking multiple listings from a single FRBO Lead! That’s why you should never pass up an opportunity to build trust and follow up with rental owners, even if commissions start off small. You might be surprised at how it pays off.
How to Talk to FRBOs
Before we dive into your FRBO Scripts, here are a few tips to keep in mind:
- Talk Less, Listen More: Aim for a 40% talking, 60% listening ratio. This balance prioritizes the client’s needs and builds trust rather than focusing only on your achievements.
- Be Flexible: Adapt your script based on the lead’s responses. Tailoring your approach to their specific needs ensures each call is personalized and effective.
- Record Your Calls: Use call recordings to analyze and refine your dialogue with a coach. This helps improve your tone, pace, and responses, enhancing your overall prospecting skills.
- Practice Makes Perfect: Consistent practice is the key to script mastery. It enhances natural delivery and builds confidence, enabling you to handle different conversations effectively.
And remember, your main objective isn’t to sell your services over the phone… The goal of every conversation is to secure a listing appointment for a face-to-face meeting with the homeowner. By mastering these objections, you’ll be able to establish trust, build relationships, and grow your business through effective prospecting calls.
Here are our top 9 prospecting objections with their common lead types, scripted responses, and strategies on how to handle them:
FRBO Prospecting Script
Start by introducing yourself and find out if the home is still available:
“Hi, [lead name]? This is [your name] with [your brokerage]. I noticed your home at [address] was for rent. Is it still available?”
If they say “Yes” follow this dialogue:
“Great! I was calling to see if you’ve ever considered selling the property.”
If they say “Yes”:
“What price would you need for it to make sense for you to go ahead and list it?”
If they name a price:
“If we could get a number for you that makes sense and that you’re happy with, how soon
would you sell?”
If they give you a timeline:
“Great, let’s go ahead and do this: I’m going to run a report to see if we can get you that number. I’ll give you a call back tomorrow. Let’s go ahead and meet out at the property and go over a strategy of exactly how it works.”
If they say “No” at any point, shift to this dialogue:
“Hey, I totally understand. Let me ask you this: Are there any other properties that may be underperforming or have bad tenants? Are there any properties you’ve considered selling?”
*REMINDER: For-Rent-By-Owners often own several properties. So even if they’re not interested in selling the property you’re calling about, there may be another one that they want to sell or do a 1031 exchange for something better. If they do have another property to sell, jump back to question two in the previous set of dialogues and proceed to set an appointment. If not, ask this question to pick them up as a buyer:
“Wow, it sounds like you’re a really serious investor. Let me ask you this: When do you plan to add to your portfolio and buy your next property?”
If they seem interested in adding to their portfolio, continue:
“I make these calls all day long, and I can often find properties for 60 to 70 cents on the dollar. If we found something you like at that rate, would you want to know more about it?”
If they say “Yes” add them to a follow-up list of interested investors. Keep in touch and let them know when you find a good property for their portfolio.
Common FRBO Objections (and how to handle them)
In real estate prospecting, effectively handling objections is key to success. Even though objections may feel like an unpleasant obstacle, they’re actually an important and necessary part of almost every conversation. That’s why it’s important to be patient, acknowledge the objection, provide reassurance,
and offer a solution that addresses the homeowner’s concerns. The good news is that FRBO objections are much easier to handle than other lead types and come up far less frequently.
Here are some common FRBO objections with scripts and strategies on how to best handle them:
Objection 1: “How much do you think I could get for my property?” or “How much is my property worth?”
Script: “Great question. Let’s go ahead and do this: I’m going to do a market analysis on the property so I
can get a really accurate number. I’ll send that over to you. If it makes sense, let’s get on another phone call and have a more serious conversation about what it would take to get it sold. Fair enough?”
Strategy: Providing a CMA is a great way to position yourself as a capable agent and establish trust to start building a professional relationship.
Objection 2: “No thanks. I can make more money renting the property out.”
Script: “Hey, I can totally appreciate that. Let me ask you this: If I could help you find another property or even multiple properties that would cashflow even more money, would you be open to doing a 1031 exchange?”
Strategy: “Diehard investors” who sell often buy another property for a 1031 exchange (to defer capital gains tax). Explore this option by offering to help expand and diversify their portfolio. Just make sure you’re prepared with a cash flow calculator as you work with these investors.
Objection 3: “Are YOU trying to buy my property?”
Script: “For the right price, I would! What would you sell it for?”
Strategy: The ultimate goal with any FRBO is to find out if they’re open to selling and how much it would
cost. So even if you’re not interested in buying something yourself, you are interested in representing a
potential buyer and, therefore, need to know how much it would cost.
Simple, Yet Effective
The simplicity of this script reflects the simplicity of conversations with FRBOs. All it takes is a few straightforward questions to find out if they’re interested in cashing out, exchanging, or buying more investment properties. And remember, many agents have reported taking multiple listings from a single FRBO Lead. Even if your conversations don’t yield any results right away, follow up and establish a relationship so you can be their go-to agent down the road.
By incorporating the script and objection handlers from this article into your prospecting routine, you can build trust with investors and landlords, understand their needs and motivations, and guide them toward a successful sale. Happy prospecting!
About REDX
REDX offers real estate professionals a complete all-in-one prospecting platform for generating listing appointments. The platform includes seller leads, a dialer with up to three lines, and a lead management tool for simple follow-up. REDX maintains the position that all agents should be compliant with state and federal telecom laws – learn more here.
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