Expired Listings Spell O-P-P-O-R-T-U-N-I-T-Y

Increased competition and inventory in the real estate industry is seeing an unprecedented number of expired listings –- properties that are not sold during the term of a listing agreement with a licensed real estate professional. Many sellers, disillusioned with the sales process, try the for-sale-by-owner route. Others become highly discriminating in their search for a new real estate agent.

Real estate software tools and marketing efforts are designed to assist sellers in areas where market time is increasing, list-to-sale ratios are decreasing, and previous attempts to sell a property with a real estate professional are unsuccessful. A new wave of real estate agents is seizing an opportunity to grow their business by building their listing inventories with the unsold, expired listings of their competitors.

In Dayton, OH, the number of properties that “expire” is the same as the number of new “pending” sales. Between March 7 and May 7, 2007, there were 138 new listings, 59 pending, and 57 expired, according to Mark Ryan, CEO, Keller Williams Advantage, Dayton, OH (shown at right).  Average days on the market in Dayton is 128, up 17% from February, 2007. Total sales in the area were down about 17% in 2006, according to Ryan.

“Many agents don’t do much to market properties,” says Ryan. “Business has been slow and many consumers think that all real estate agents are the same. Preparation of the house and staging are important to consider.” Ryan is an Accredited Staging Professional and uses staging expertise to counsel sellers how to ready their properties for sale.

Ryan uses software to track expired listings from the day the listings expire on his local multiple listing service and he participates in a daily mastermind group, The EXPIRED Real Estate Game.  The game was designed by real estate coaches Joeann Fossland and Patti Kouri. It couples a coach facilitator with other real estate agents and brokers from all areas of the country in a daily teleconference to prepare to meet the growing expired market.

“The market has closed up” says Ryan. “Getting into the game offers me a chance to develop discipline and accountability. Players work with partners and we report to each other daily to keep ourselves on our toes.”

The RedX software imports expired listings from the user’s multiple listing service and couples the listing data with tax record and other contact information including seller’s name, address, and telephone number. The RedX automates a process that can be time consuming and labor intensive: It scrubs the telephone number against the national “Do Not Call” register and cross checks the listing with new listing data on the MLS. Previous expired listing downloads are flagged daily when expired listings are relisted by previous agents or new agents.

One third of expireds will leave their properties off the market up to four months, according to Curtis Fenn, director of sales for The RedX.

Kathleen Nagro, ABR, CRS, GRI, e-PRO, is using The RedX to build her listing inventory in the Naples FL, market area. Nagro recently moved to Florida from Connecticut. Nagro says that The RedX reduces the time it takes to update her database daily; a 90-minute process to gather data sufficient for a half hour’s worth if calls is completed in mere seconds with The RedX software.

Christine Willard is a 26-year veteran associate broker and a leading agent in Greensboro, NC, where expired listings have been a major part of her business for most of those years. Expired listings there reached 67.4% in the first four months of this year, versus an historical 50% expired rate, says Willard. Greensboro is located in The Triad area of North Carolina, a region that has seen major economic setbacks with downturns in the tobacco, apparel, and furniture industries.

“In the 1990’s Greensboro homes appreciated at an average overall rate of 4%. Now with enormous job losses and people not moving here the growth and appreciation rates have stalled. The home sellers don’t believe us when we tell them that,” says Willard. “since 1990 we have never had a market where we have seen three or four listings on a house.”

Forty percent of the Willard’s listing inventory is drawn from expired listings. She hears four major complaints from sellers on the expired listing rolls:

Willard says that sellers who have properties that remain unsold after months on the market are often largely responsible for properties appearing on the expired rolls rather than the sold roster. “I will not market a listing that does not show well,” she says. “When a house shows poorly you can market it to death and it still won’t sell.”

The North Carolina REALTOR says that good photos are key to successful marketing on the Internet: “Nine times of 10 the photos [on the previous listing] are terrible. A house must have Internet curb appeal. A property will not stand out without many good photos and a virtual tour.”

Expired listings in Orlando, FL, increased from 2,220 in the first quarter of 2006 to 4.093 in the same period this year. Paula Bean, a REALTOR for 27 years, says that she has never seen so many expired listings. She believes that the increase in expired listings is tied to increasing foreclosures.

“I never worked expired listings and foreclosures in the past,” she says.”I am now! This is where the market is.”