Have you heard a real estate agent reference an expired listing? You probably wondered what it meant.
Expired listings happen when there is no success in selling, and they fall out of the Multiple Listing Service. It is one of the MLS statuses that signify failure in selling a property.
You will likely sign an exclusive right-to-sell listing agreement when you sell your home with a real estate agent.
An exclusive right to sell, among other things, will authorize your agent to list the home in the Multiple Listings Service.
The MLS is one of the most potent market tools, as it allows thousands of real estate brokers and agents to know a property has been put on the market.
Further, the Multiple Listing Service distributes the MLS listing data to some of the best real estate websites for home buyers. It allows potential buyers to view homes for sale in the comfort of their homes.
From many years of experience as a Realtor, many sellers don’t know what listing expired means. They will find out when their contract ends and start receiving solicitation for their business from other agents.
What is an Expired MLS Listing?
An expired listing refers to a property listed for sale on the market but failed to sell within the specified time frame outlined in the listing agreement.
When a property listing expires, the listing agreement between the homeowner and their real estate agent has ended without the property being sold. This can happen for various reasons, such as the property being overpriced, lacking marketing efforts, or facing stiff competition in the market.
An expired listing can frustrate homeowners, often indicating a failed attempt to sell their property. It may also lead to disappointment, as the homeowner may have had high expectations and plans based on the sale of the property.
An expired listing could also impact the homeowner’s plans, such as relocating, downsizing, or purchasing a new property.
Missed Opportunity to Sell Your Home
An expired listing can be seen as a missed opportunity from a real estate agent’s perspective. It signifies a property not successfully sold, potentially wasting time and resources.
Agents may need to reassess their marketing strategies, pricing, or other factors contributing to the property not selling. They may also need open and honest communication with the homeowner to determine the best course of action, whether it involves relisting the property or making necessary adjustments to increase its market appeal.
Sometimes, other real estate agents may see an expired listing as a potential opportunity. Realtors can contact the homeowner to offer their services and expertise, hoping to secure a new listing agreement and return the property to the market.
Skilled agents may offer insights into what went wrong with the previous listing. They will also present a new strategy to increase the chances of a successful sale. Overall, an expired listing is a learning experience for homeowners and real estate agents. It highlights the importance of proper pricing, effective marketing, and a comprehensive understanding of market conditions.
Real Estate Contracts Expire After an Agreed-Upon Period
Real Estate listing contracts are usually three to six months long but are entirely negotiable between the Realtor and the client.
If a home does not sell within the contract period and the seller does not sign an extension, the property will “expire” from the MLS.
Expired MLS listings are a status that real estate agents can search for. It is not uncommon for real estate agents to reach out to these sellers to see if they are still interested in selling.
Real Estate agents will pitch their services to relist the property. Many agents will call or send letters to sellers of expired real estate listings.
Essential Facts Clients and Homebuyers Need to Know
1. “Listing expired” refers to the status of a property listing that has passed its expiration date.
2. When an MLS listing has expired, the agreed-upon period for selling or renting the property has ended.
3. Typically, expired listings occur when a property does not sell within the designated listing period.
4. Upon expiration, the listing agent or agency no longer actively markets the property.
5. Sellers may choose to relist their property with other real estate professionals after it has expired if they still wish to sell it.
6. Agents may recommend revisiting the pricing strategy or making improvements to increase the chances of a successful sale upon relisting in MLS.
7. An expired agreement can provide valuable market data for agents and a homeowner to reassess their approach in terms of pricing, marketing, and other factors.
8. Some owners may switch real estate agents or agencies after their listing expires if unsatisfied with the previous representation.
9. They can indicate stagnant or slow real estate markets in certain areas.
10. As with any expired listing, it’s essential for sellers and agents to reevaluate their marketing tactics and consider a new strategy for reaching potential buyers to get an offer.
Expired vs. Withdrawn Listing
There is a significant difference between expired and withdrawn listings in the MLS. Expired listings reach their contract conclusion without selling. The contract is no longer in force when it expires.
On the other hand, a withdrawn listing is when the seller takes their home off the market. The listing contract remains in full force. A real estate agent is not allowed to contact a home seller when it is withdrawn from the MLS.
Expired vs. Canceled Listing
Canceled listings differ from expired listings in that the seller has terminated the contract before its expiration. A seller and real estate agent must mutually agree to cancel a listing.
Both parties will sign a contract cancellation. Canceled listings show up as such in the Multiple Listing Service.
Canceled listings can happen for several reasons, including dissatisfaction with an agent or a seller’s plan change.
Two other common MLS listing statuses are contingent and pending. They are the opposite of an expired listing in that the seller has found a buyer.
How to Get Voided Listings
Some real estate agents will make it a practice to look over listings that expire daily. One of the ways to acquire new business is to look over a list of properties that did not sell. They will contact the seller to procure their business if a listing seems appealing.
It is a method many agents find successful in starting a relationship with a potential new client. They will call owners to establish these relationships and get in the door for a conversation. It is an approach many agents find compelling to showcase their value.
Getting expired listings is far more common in a buyer’s market. When homes are more challenging to sell, there will be a higher percentage of expired listings.
In hot seller’s real estate markets, very few listings in MLS will expire. Homes sell very quickly, quite often with a bidding war.
Scripts and Letters Real Estate Agents Can Use to Get Listings
Real Estate agents who make it a practice to go after expired MLS listings will often have a script that they follow. Following time-tested expired listing scripts improves an agent’s chances of landing one of these failed home sales. There are many examples of scripts for expired listings.
The Close shares several expired listing scripts that have been successful for agents. Some agents will make phone calls using the expired listing scripts.
Others will send a letter to expired listings. The expired listing letter will contain a standard script they have used successfully to get a response from sellers.
The problem with expired listing letters is that they are less likely to work when many agents send them out.
Home sellers can quickly get annoyed with receiving these letters. Some agents will also mail expired listing postcards. The process involves being very consistent with your communication. To be successful, you may need to send your expired offer multiple times before you receive a response.
What Causes Properties to Expire?
Why do so many homes for sale “expire” from the MLS and never sell? The answer to this question is a relatively simple one.
Homes that don’t sell and expire almost always do so because of one of the reasons discussed below.
Make sure you don’t make one of these home-selling mistakes!
Overpriced Homes For Sale
One of the daily rituals of most Realtors is to check the daily log of homes that have come up “expired.”
An expired listing means the contract between the Realtor and the seller is over. Essentially, for whatever reason, the home failed to sell.
At any given time, some properties can fail to get sold. There is usually one significant common denominator in Real Estate failure.
The number one reason why any home expires, of course, is that it is priced improperly. There are cases where the price was determined either by an overzealous agent or a seller living in fantasy land.
Unfortunately, this is the most significant deterrent to having a successful Real Estate transaction.
The price set in your home can be more than 75% of the marketing. What in the world does that mean, Bill? If a house is overpriced, the best Realtor in the country with the most sophisticated marketing will not be able to finish the closing process.
There is no easy way to say this, but you will languish on the market if you choose the wrong price. All the marketing and advertising will be wasted along with a lot of time. For some reason, many sellers think time is their friend when it is their enemy.
Days on The Market is Your Enemy in Real Estate
As a Realtor, you don’t know how often 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 get their price. Folks, this rarely ever happens.
Days on the market is one of the most vital statistics in the Real Estate industry. Every buyer asks for this one piece of data when viewing a home. 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 there will be more room to negotiate. This is just human nature. Buyers also start to wonder whether the home could be wrong when it has been on the market for an extended period.
As a home seller, you must remember that you are in the driver’s seat when negotiating when your home is first listed for sale. After a certain time, the pendulum swings the other way, and the buyer is in the driver’s seat.
Picking a Terrible Realtor Leads to Contracts Running Out
The second most significant cause of Real Estate failure is choosing an awful Realtor to represent you in your home sale. Often, choosing the wrong Realtor relates 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 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, a dirty little practice in real estate circles is known as “buying a listing,” which many agents employ as part of their business practice.
You see, in many cases, when a seller is interviewing multiple Real Estate agents, a less skilled Realtor will tell a seller what they want to hear to get the listing.
The agent’s comparative market analysis will either have inappropriate comparable sales, or they will tell you your home is much better.
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 terrible Realtor knows this and uses it to their advantage. A seller never wants to leave money on the table, and rightfully so.
The Price Reductions Come Calling
With a contract, little 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, some agents 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 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.
Poor Real Estate Marketing Can Cause Expirations in Contracts
So how does a home seller increase their chances of working with a Realtor they will 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 more to work with a top Realtor.
If more homeowners took the time to interview potential Realtors to work with, there would be many more happy campers.
One of the things every home seller should do is look for a Realtor who is Internet savvy and has a social media marketing strategy. The majority of all buyers today find their next home online.
You should seek an agent who can make your home the center of attention online.
Not only do you want to find your home on the top real estate websites that home buyers visit, but you should demand that your home look outstanding.
Poor Photography is a Common Cause of Failure
Excellent photography, detailed listing 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, chances are you are in for a not-so-pleasant experience.
Your home will either become an expired real estate listing, or you’ll be looking to fire your real estate agent.
Interesting Statistics on Listed Houses
Final Thoughts
Home sale failure is quite common and usually boils down to all the reasons mentioned above. There is a straightforward solution if you don’t want your listing to expire.
Don’t hire a real estate agent that will over-promise and under-deliver. This includes overpricing your home. Incorrect pricing is the #1 reason homes do not sell.
About the Author: Bill Gassett, a nationally recognized leader in his field, provided information on expired real estate listings. He is an expert in mortgages, financing, moving, home improvement, and general real estate.
Learn more about Bill Gassett and the publications he has been featured in. Bill can be reached via email at billgassett@remaxexec.com or by phone at 508-625-0191. Bill has helped people move in and out of Metrowest towns for the last 38+ years.
Are you thinking of selling your home? I am passionate about real estate and love sharing my marketing expertise!
I service Real Estate Sales in the following Metrowest MA towns: Ashland, Bellingham, Douglas, Framingham, Franklin, Grafton, Holliston, Hopkinton, Hopedale, Medway, Mendon, Milford, Millbury, Millville, Natick, Northborough, Northbridge, Shrewsbury, Southborough, Sutton, Wayland, Westborough, Whitinsville, Worcester, Upton, and Uxbridge MA.
Bill your article on expired listings and why homes fail to sell makes perfect sense. I know if selling any product whether it is a piece of property or something else, the asking price is a huge component of getting it sold.
Ken I am glad you liked the article on Expired Real Estate. I have found that many home seller’s do not do the proper research when selecting an agent. They often times hire the Realtor that gives them the highest price. This of course doubles the probability that the home will not sell and end up expired. I can’t tell you how many times I have been the second or third Realtor in to finally get the home sold!
So many sellers think the agent does everything and they sit back and are lazy. They have to choose the right agent to start and make the home inviting then GET OUT when buyers come see it.
Bill, I think I overlooked this post over the summer, but it’s a good one. Maybe if home sellers understood there are agents who build their whole business around overpriced and expired listings it will help them to understand that they should not overprice.
Rich that is a problem in our industry. I know a number of Realtors who will tell a seller what they want to hear in order to get the listing. Often times they don’t care so much about selling the home itself but using it as a vehicle to draw buyer calls.
Anyone with a license can list a house. It takes knowledge and experience and DRIVE to get it sold. Sometimes that hard for a seller to hear but it’s the truth.
Very true Vernon. So many seller’s believe putting a home a sign on the lawn and putting it in MLS is all it takes.