Expired Listings
Expired listing are a highly visible source of leads.
Similar to the FSBO, the Expired Listing crowd is visible. You don’t have to scour the world, overturning rocks and shaking bushes to find them. They are right there in front of you all the time.
The MLS is the only place you need to look in order to “spot” this rich vein of gold called the Expired Listing.
There really isn’t any “prospecting” involved. Simply run a MLS hot sheet every afternoon or once a week to get all the expired listings in your area of choice.
What is really exciting is you will also be provided with a tremendous amount of information you can use to determine how best to ‘work’ the listing. You have the owner’s name, address, phone, type home, asking price, reductions...you have it all...right there at the end of your finger tips.
Now what could be easier than that?!
Not much, I tell you.
The Easiest Listing To Secure Is The Expired Listing.
This wonderful homeowner is already conditioned to doing business with a real estate agent. Your only job, really, is to demonstrate that he or she should re-list and re-list with you.
You don’t have to overcome the “commission” hurdle. You don’t have to “justify” your fee. You don’t have to “sell” the value of your services (though you might have to reeducate this prospect on the value of having a professional marketer on his team versus just another realty agent).
The “selling” job is essentially done. This makes the expired listing prospect an easy listing to secure.
There is little competition vying for the expired home seller’s listing.
I am not suggesting that the expired listing homeowner doesn’t receive a number of calls attempting to re-list his property - he does. He probably receives more solicitations than any other type of prospect.
But that doesn’t mean you are up against any serious competition. Confused?
Think about it. The original listing agent is certainly not a strong contender to re-list this homeowner and, in a majority of cases, any agent from the original agent’s brokerage or franchise is not a serious contender due to the fact that the homeowner feels the listing agent and company didn’t do an adequate job. They have obviously had a bad experience.
The rest of the expired listing solicitations the home seller receives, for the most part, will be made by newer, recently licensed agents because that is who they are instructed to call upon by the majority of realty trainers in addition to FSBO’s.
So, while the fact remains that the expired prospect does, indeed, receive a large number of calls - the quality of calls and the quality of the caller’s presentation skill is usually minimal leaving you, the practiced, polished professional, fertile ground to plant your seeds.
There is no serious competition going after the expired listing unless, of course, this is the niche market one or two of the top producers in your area have chosen to focus upon.
And even if that is the case, you simply have to position yourself differently. You shouldn’t ever fear competition. Competition can be used to hone your skills and to motivate you to even strive for even greater plateaus of success.
Let’s take a look at the Expired’s Multiple emotional mindset...
Embarrassment, Anger and Frustration
While the expired multiple listing is the easiest listing to secure, that is not to say you don’t have your work cut out for you.
You do.
The key to your success lies in being able to understand and empathize with the emotional state of the prospect. You need to be able to diagnose the immediate emotional condition of the expired seller and gear your approach and presentation to address these feelings and concerns.
Realize that this homeowner is probably feeling embarrassed. He’s embarrassed because his home hasn’t sold. The neighbors have watched his home sit on the market forever. His family and his friends all know of his failure and it’s embarrassing. It’s humiliating.
His decision making ability is called into question. After all, he made the decision to hire the real estate agent. He made the decision to paint this room and that room, to re-carpet and determine a price. All of those decisions were his responsibility and, evidently, he erred somewhere. It’s embarrassing.
Additionally, this homeowner is probably feeling personally rejected. He’s proud of his home, it is the place he chose to live and raise his family. He has a number of strong emotional ties to the home. He’s laughed, cried, anguished and rejoiced within the confines of its walls. The home, in a very real sense, is a part of him.
And the home was rejected. Everyone who inspected the home rejected it. Everyone. And he takes it personally.
This mass rejection humiliates him on a personal level. It is not only the house that was rejected - it was him. And his self-esteem is bruised. The entire event was and is emotionally painful.
Pain, emotional or physical, calls into play our natural tendency towards “fight or flight.”
Anger, the “fight” response, is normal. He’s angry because his property has been rejected and he doesn’t understand why. He’s angry because he is being forced to change whatever plans he had made.
He initially directs his anger towards the listing agent and the agent’s company because they are ‘directly responsible.’ He trusted them to come through and they didn’t. His trust was violated.
Secondly, this anger is targeted at all real estate agents. After all, as members of the Multiple Listing Service, they all were responsible to market his home and they didn’t. In his mind, every agent in the area knew his home was for sale and they didn’t produce a buyer. And he is really, really pissed off! And frustrated.
Frustrated because his hands are tied. He feels helpless to “fight” a situation over which he exercises no control. What more could he have done? He did what he was supposed to do - hired an expert - and it got him nowhere.
The homeowner with an expired listing is an emotional boiler ready to blow. You must allow the homeowner to let off steam. You must let them vent. And they will. Expect it.
Expect to have your professionalism called to question. Expect the homeowner to blame everyone and everything for his home not selling and his dreams and goals being crushed.
It’s only natural - a defensive response.
Encourage them to vent by asking them why they think their home did not sell. Then be quiet and listen. In most cases, they will tell you everything you need to know to secure their listing. Everything.
Now you and I know that any number of factors could have been and probably were responsible for their home not selling. And chances are...the primary reason, the real reason the house didn’t sell, was because it was overpriced for the location, condition and terms they were offering.
But it is rare indeed for the homeowner to admit the real reason. More likely, the excuses they will come up with will be that the agent didn’t do anything. There was not enough advertising. Not enough open houses held. They listed with too big a company or too small a company.
What ever they think is the reason their home didn’t sell should be the area that you stress you can fix. Since they perceive a problem - address that specific problem and you will go far to securing the listing.
Don’t do what many, many inexperienced agents (and even experienced agents) do when first approaching the anguished expired listing homeowner, i.e., get trapped into answering the question: “Why do you think my home didn’t sell” and providing the standard (often correct) answer: “I think your price was too high.”
Any agent who approaches the expired listing in this manner has effectively shot himself or herself in the foot and rendered themselves lame.
Think about it.
There are any number of motivating factors underlying the sale of any home. However, two are dominate. Money and emotion.
Emotionally, the expired listing seller is devastated. He’s embarrassed, angry and frustrated. The only solid hope left for this homeowner is his economic position - the price he wants out of his property.
When you walk in and announce “Your price is too high” you have very effectively punctured the one thing the homeowner had left - a hope of getting his price, of getting the amount of money he wanted out of the deal.
Now, not only is this home seller emotionally devastated, by recommending a reduction in the asking price up front as the solution to the “not selling” problem, the home seller is left with nothing. No leg to stand on. And he finds himself in a hopeless situation. Absolutely hopeless. And it’s “fight” or “flight” time again.
And since it was YOU who stripped him bare - do you think you have any chance in the world to redeem yourself and secure the listing? Hardly.
Make sense?
Good.
Walk away from this chapter with two things burned into your mind:
1. The expired listing home seller has been and is emotionally distraught. This is neither good nor bad. It is simply the way it is. Acknowledge their feelings. Allow them to vent their frustrations. Encourage them to tell you why they think their home didn’t sell and listen to their answers. They will tell you everything you need to know in order to secure their listing.
Perhaps one of the greatest questions you can ask is: “Mr. Home seller, what one thing do you believe your agent should have done and, if he did, you truly believe your home would already be sold? If you were the agent attempting to market this home, what would you do?”
Your chances of securing the listing go up dramatically if, during your presentation, you “play back” what the homeowner said the agent should have done as well as what the home owner himself said he would do if he were an agent. How can they fight or object to their own “system”?
It’s pretty hard.
2. Even though you determine in your research the reason the home did not sell was because it was overpriced for the market - don’t get trapped into stating that as the reason and alienating yourself immediately.
Give your relationship a chance to develop with the expired listing owner before you breach this subject.
By suggesting a lower price as the solution to the “not selling” problem, you present another negative into the situation and you will be resented for it.
Instead, offer a semblance of hope. The homeowner expects you to blame price and suggest he lower his price - just like every other agent has done (and walked away without the listing), but don’t be trapped into making this mistake.
After all, how can you be certain price is the issue (really?) if some other agent had the listing? Maybe it wasn’t marketed properly. Maybe the agent had since quit the business and left the listing orphaned without adequate market exposure and attention. Maybe brochure benefit sheets were never displayed and offered. Maybe it wasn’t shown enough. Perhaps other agents never really became aware the property was for sale. Maybe the MLS information was inadequate or entered wrong.
When asked point blank (before you have a chance to cement the relationship): “Okay, why do you think my home didn’t sell?” - answer something to the effect of: “You know, Mr. Emotionally Distraught, I cannot speak with authority, really, since I don’t have all the facts. For instance, maybe you didn’t receive enough showings. How many open houses did you have?”
Make any statement besides “the price is the culprit”
and regain control by asking questions.
Let’s go on...
Expired Listing Prospecting System
The most productive method of prospecting the expired multiple listing is (and I know you probably don’t want to hear this) is cold calling the homeowner first and then following up with your mailing.
The reason you want to cold call first is due to the fact that while many sellers do not have any intentions of immediately relisting their homes after the original listing expired, there are some very motivated sellers who will relist immediately, the very same day their listing expired.
With that in mind, the only way you have a chance to secure the listing is either to set an appointment with these folks or do something which will stall them, prevent them from relisting with any agent until you have had your moment at the podium.
If you want to have any chance at listing these highly motivated sellers - you must, absolutely must, call them immediately upon their listing expiring.
In order to pull this off, you must have a system in place to notify you of expired listings as they expire. Make it a daily practice to run the MLS hot sheet every afternoon. Obtain your leads every single day and work those leads every single day. With expireds, timing is of the essence.