Why do so many homes for sale “expire” off of the MLS and never sell? The answer to this question is a relatively simple one. Keep reading for the primary reason there are so many expired listings.
Overpriced Homes For Sale
On of the daily rituals of most Realtors is to check the daily log of homes that have come up “expired.” What an expired listing means is the contract between the Realtor and the seller is over. Essentially for whatever reason, the home failed to sell. At any given time there can be some properties that fail to get sold. There is usually one big common denominator in Real Estate failure.
The number one reason why any home expires, of course, is that is priced improperly. There are cases where the price was determined by either by an overzealous agent or by a seller that is living in fantasy land. Unfortunately, this is the biggest deterrent to having a successful Real Estate transaction.
In today’s challenging Real Estate environment, the price that is set in your home can be more than 75% of the marketing. What in the world does that mean Bill? Simply, if a home is overpriced, the best Realtor in the country with the most sophisticated marketing will not be able to get you to the closing table.
There is no easy way to say this, but if you choose the wrong price, you will be doomed to languish on the market. All the marketing and advertising will be wasted along with a lot of time. For some reason, many seller’s think time is their friend when in fact it is their enemy. As a Realtor, you don’t know how many times I have heard “Bill we want to price our home at X because we are in no rush.” The seller thinks they can wait for the right buyer to come along to get their price. Folks this rarely ever happens.
“Time on the market” is one of the most important statistics in the Real Estate industry. This is the one piece of data that every buyer asks for when viewing a home. In fact, I can not even remember the last time a customer did not ask me “Bill how long has this home been on the market?” Every buyer wants to know this because if the home has been on the market for a long time, they feel like there will be more room to negotiate. This is just human nature. Buyers also start to wonder whether there could be something wrong with the home when it has been on the market for an extended period.
As a home seller what you need to remember is that you are in the driver’s seat as far as negotiating goes when your home is first listed for sale. After a certain point in time, the pendulum swings the other way, and the buyer is in the driver’s seat.
Picking a Poor Realtor
The second biggest cause of Real Estate failure is choosing a poor Realtor to represent you in your home sale. Often choosing the wrong Realtor relates back to the whole pricing issue. What do you mean by that Bill? Real Estate sales is a very competitive business. In many cases, Realtors will interview with a home seller for the opportunity to list their home. The problem many professional agents run into is that for every top Realtor there are four lousy ones!
Unfortunately, there is a dirty little practice in Real Estate circles known as “buying a listing” that many agents employ as part of their business practice. You see in many cases when a seller is interviewing multiple Real Estate agents; a lesser skilled Realtor will resort to telling a seller what they want to hear to get the listing.
We all want to believe our home is better than Mr. & Mrs. Smith’s home that just sold down the street even though it is nearly identical. A poor Realtor knows this and uses it to their advantage. A seller never wants to leave money on the table and rightfully so.
With a contract in hand and not much activity on your home or feedback saying the home is priced too high, the Realtor starts to badger you for price reductions. As crazy as this sounds, there also some agents that don’t even care enough to ask for price reductions. Don’t they care if the home sells? Of course, they want it to sell, but some agents take an overpriced listing just for the opportunity to get buyer prospects to work with. In other words, they use your home as a marketing opportunity to get business elsewhere.
Folks the Real Estate market data never lies. Avoid falling into this trap at all costs. Being tied to this kind of agent is the pits. You may be able to drop your price, but you signed a contract and will be stuck with this agent until the contract expires. Look over the market appraisal through the eyes of a buyer. Think of your property as a house, not a home. It is a commodity. When emotions are involved poor decisions are made. I am sure many good agents can empathize with me here on this onePoor Real Estate Marketing
So how does a home seller increase their chances of working with a Realtor they are going to have a great experience with? Ask excellent Real Estate interview questions. Trust me when I tell you a poor Realtor who doesn’t do much business will cringe having to answer these questions! These are the kind of questions that can weed out a less than stellar agent. Most of the time it doesn’t cost any more to work with a top Realtor. If more homeowners took the time to interview potential Realtors to work with there carefully would be a lot more happy campers.
One of the things every home seller should do is look for a Realtor that is Internet savvy and has a social media marketing strategy. The majority of all buyers today find their next home online. You should be seeking an agent that knows how to make your home the center of attention online. Not only do you want to find your home in the top Real Estate websites that home buyer’s visit but you should demand your home look outstanding.
Excellent photography, detailed descriptions with your home’s best features highlighted and video tours should be standard! Some Realtors don’t even have a website to market homes. A Realtor not having a website to market homes should be unacceptable! If a Realtor can’t even invest in their own business, do you want them working for you? Far too many sellers believe that all Realtors do the same things to sell homes. This could not be further from the truth.
There are pros in every business. While in most industries there is an 80/20 rule where 80% of the business is done by 20% of the people, in the Real Estate industry it is skewed far more dramatically. An incredible 94% of the business is done by 6% of the agents!
This leaves an easy opportunity for displeasure in a Real Estate transaction. If you hire Polly the part timer who doesn’t do a lick of business, then chances are you are in for a not so pleasant experience.