A marketing strategy for homeowners with expired listings should be part of your overall plan to acquire new clients, but it requires a sound marketing strategy. You are not the only real estate agent working the listing, so you need to stand out.
What is an expired listing? Every listing contract has a termination date. Once that termination date passes, the listing is deemed expired. When this happens, as a licensed real estate agent, you have the right to approach that seller, offer to represent them and ask them to sign a listing agreement with you. Check your local Real Estate Board rules before approaching expired listings – and be considerate of the original listing real estate agent.
Know Your Expired Listing Prospect
It is a good idea to understand the mindset of homeowners whose house did not sell. Knowing what they are going through emotionally will help you gain their trust, address their concerns and possibly get the listing.
When a home does not sell by the listing termination date, the sellers may try to rationalize it by saying they didn’t really want to sell the house or that they chose the wrong time of year, and it may appear that they are not upset. Don’t interpret this as a sign they will not re-list, because deep down they are probably upset by their home not selling.
I have heard from clients who market to expired listings that these sellers will probably take their frustration out on you, even though you aren’t the real estate agent that originally listed the home. Don’t take this personally, as they may just be transferring their frustration with the first real estate agent to you.
What Are the Options For an Expired Listing?
There are usually four options available to the seller:
- Re-list with their current real estate professional
- Take the house off the market
- List the house as for sale by owner (FSBO)
- List with you
Option 1 – Re-list with their current real estate professional: Listings often expire because the sellers go against the advice of the real estate agent, which contributes to the home not selling. This may not be the type of expired listing you should pursue; in fairness to your fellow real estate agent, the seller should re-list with the original real estate agent.
Option 2 – Take the house off the market: When a house does not sell, the sellers might rationalize the failure by saying they did not really want to move or that the housing market is in the doldrums or it is too much trouble.
This is your opportunity to rekindle their enthusiasm by asking, “Why did you originally put your house on the market?” Then, convince them that there is nothing stopping them from getting their house sold so they can pursue their original dreams. This is where you need to have a marketing plan that demonstrates what you will do differently and try to find new angles to market their home. One of my clients gets the home measured even though it was measured before and often finds extra square footage that was missed originally.
Look at past advertising and determine if the other real estate agent might have missed something important, like the ability to rezone and split the lot, add a rental suite or move a few walls to dramatically improve the look of the home.
Option 3 – List the house as for sale by owner (FSBO): If you are marketing to homeowners with expired listings, be prepared to have to explain that, as in any other business, not all real estate agents are the same. If they are lumping you in with the other real estate agent, be prepared to demonstrate that you are different and that you bring a new approach to the marketing of their home. Often the homeowners have decided that their home did not sell because the real estate agent did not do anything, and therefore all real estate agents do nothing. That is when the FSBO looks attractive, as they think they are capable of dealing with all of the paperwork and will save a lot of money in commissions.
You must be prepared to explain why listing with you will be different and that in the end they will be ahead financially and probably emotionally.
Option 4 – List with you: The most surprising thing about marketing to homeowners with expired listings is that the majority of the time they list their home with another real estate agent. So expect the unexpected and have the mindset to accept that being the best you can be is an option.
The secrets to marketing to expired listings are:
- Outshine the last real estate agent and others that are competing with you.
- Be prepared to meet the sellers at any time they suggest.
- Have all the paperwork ready just in case.
- Be persistent.
A Four-Step Program to Market to Expired Listings
Drop off a letter expressing your concern the home did not sell, explaining the reasons they should list with you and asking the sellers if you could meet with them. Include some of your fantastic-looking marketing material.
The next day, mail them a follow-up letter referring to the one you hand delivered and include part of your marketing plan for selling their expired listing, focusing on the positive side.
Two days after the letter should arrive in their mailbox, drop off another letter with a simple CMA and anything else that makes you stand out.
A few days later, mail another letter that contains an action plan for selling their home that includes a calendar of events you will undertake.
The next steps will depend on how much progress you are making with the seller, but I believe persistence will pay off.
What Do You Do To Make Sure You Succeed Where Others Failed?
You don’t want to be the “dog that caught the car”; you need to be ready to deliver.
- Set realistic expectations for the seller.
- Fix the deficiencies that might be preventing a sale.
- Price the home correctly.
- Create fabulous marketing material.
- Host great open houses and invite the neighbours.