Years ago, I heard the expression "The early bird gets the worm but the second mouse gets the cheese." Makes sense once you think about it, especially when it comes to real estate.
So often, an agent takes a listing, spends a bunch of money and time on it, only to lose it when the listing expires.
When I started in this business more than 20 years ago, I had just moved back to the area and knew relatively few people. The "Sphere of Influence" approach was going to leave me pretty hungry and door-knocking and cold-calling from the phone book seemed an effort in futility. "Farming" took months, if not years, to cultivate and I didn't own a home so working my own neighborhood wasn't an option.
Then I remembered the second mouse gets the cheese and I turned my attention to expired listings. I decided to become the very best at "expireds," learning how to talk with them, how to listen to them and how to market their unsalable homes.
Yes, unsalable homes. One fundamental principle you must accept about expireds is that no matter how long the home is listed, at its current state of marketability, it is unsalable. If they were marketable, they would most likely be sold, right?
What I discovered is that there were three primary reasons a home is unsalable:
1. Price - No surprise here. Most expireds are simply priced too high. 90% of expireds can be made saleable simply by changing their price. Sometimes it requires only a small adjustment - 5 to 7% -- but often, the adjustment is in the 20 to 30 % range.
2. Location - How many times have we heard "Location, location, location" as the key to real estate value? Let me be clear: If the home is on the edge of a landfill or fronting an eight-lane highway, on final approach to LAX or in a swamp, it will not be as valuable as a comparable home in a subdivision at the end of a cul de sac.
Agents must take a home's location into consideration in establishing the price.
3. Condition - Most expireds are not in great condition. Remember: Sharp SELLS. From the first impression a buyer gets from the exterior of the home to the color of the towels in the bathroom, every aspect of the home - the way it looks, the way it smells, the way if feels - must appeal to the buyer.
4. Quirkiness - After working expireds for many months, I realized that many expireds have a certain "quirkiness" about them. I can't really explain it as clearly as price, location or condition, but they don't quite fit our expectations. A home with five bedrooms and one bath, for example. Or a 3,500 square foot home with a one-stall garage. Sometimes, it is an unusual floor plan or architectural design. A southwestern-style, stucco-finished ranch with rounded corners and a flat roof would be "quirky" in a neighborhood of Cape Cod two-stories, for example. Or a one-bedroom condo in a project where everything has two bedrooms or more.
If you want to work expireds, sharpen your senses to identify why the home hasn't sold and then fix the problem. Is it location, condition, its quirkiness, price ... or all of the above?
Then, remember this: You can improve its condition, you may even be able to mitigate its quirkiness by adding a bathroom, for example, but you cannot change its location.
There is only one of the four things that will work every time: Adjust for the home's shortcomings in condition, quirkiness or location by adjusting the price. If a seller doesn't want to adjust their price to compensate for poor location, poor condition, an odd floor plan, they can: 1) Move the house, 2) repair and redecorate, and 3) fix the oddity.
In most cases, changing the price is the more cost-effective solution.
Are you a mouse that enjoys the taste of cheese? Or are you just looking for a listing?