Greg: Welcome to this edition of the Greg Fly Podcast, my excuse for talking with people I find interesting about subject that I'm curious about. I'm Greg Fly Fleischaker, your host and today once again, joined by Jon Mand. I have to name him my co-host here pretty soon, from Lenihan Sotheby's International Realty where we are both licensed real estate agents. Jon, good to see you.
Jon: Great to see you, Greg.
Greg: I want to talk about expired listings today if that's all right. When someone has put their home on the market previously, let's say last year probably with a different agent and it didn't sell and the listing contract expires, that's what we call an expired listing. If you're all right we can talk about maybe the psychological mind of that seller and then how we might approach helping that seller when it comes to the market, is that all right?
Jon: Yes, definitely.
Greg: Okay. I know it's very depressing a lot of times when someone has tried to sell their house and I'm sure you've talked to people who have done this. They said, "Hey Jon, I'm sorry I'm going to go sell to someone else," and then either the marketing isn't up to snuff or the price is off or it's just bad timing, a bad market turn and then they come back to you and then say, "That was horrific," right? That was eight months on the market and they get their hopes up, everyone gets their hopes up when they put their house on the market and then boom eight months later nothing happened. It's really depressing.
Jon: It sure can be. Yeah, I mean, there's obviously some event in their lives that occurred that's made them decide it's time to sell the house and move somewhere. There's an emotional aspect, you get wrapped up in that and excited about the new chapter and then you find out you're having a tough time closing the old chapter.
Greg: That's right, two chapters at once.
Greg: It's hard to say exactly if someone approaches you, "Why didn't my house sell?" There are all sorts of factors and we're not here to bang on other agents or other brokerages but sometimes it just wasn't a good fit, right..
Two Or Three Major Factors In Expired Listings
Greg: Between the agent and the seller, it might have been the price, it might have been the marketing. Do you find that there's one thing more than another or if you like to say it, it depends? I mean, I've been through some houses that are just filthy, and they tried to sell it, perhaps people could take the time to really get their house cleaned up before trying to sell it, right?
Jon: No, it typically boils down to one of three things and they're interrelated to some degree. But it's price, they just had the price wrong and it's not in the market at the level that it needs to get showings, second showings and offers or it's the condition of the property. Again, bad condition can be overcome with an adjustment of the price but the condition might not be where it needs to be to get buyers excited about it to give them that good first impression and get it moving. Then lastly marketing, you can have the best house in the best condition at the best price and if nobody knows about it well it's tough to sell it.
The marketing becomes a big part of it and by marketing I don't mean just putting it on the MLS but actually actively marketing the property, online, social media outlets, online paid advertising, print advertising and then just old fashioned salesmanship. Being on site to try to sell the property at the point you do have somebody in the door, being present for the showing and working that, hosting open houses if it's applicable for the price or the neighborhood or if it's effective I should say. The marketing is a big piece of it and that's the component that we usually see, price and then the marketing or the two that we usually see on an expired listing, one of those is off. The condition of the property is usually not as big of a factor.
Greg: Right, because as you mentioned you can overcome that with price so you can lower it the appropriate amount and hit that. I mentioned dirty houses before that I've seen some people try to sell, if a seller doesn't want to take care of that before getting the property on the market, then they can either lower their price, or be prepared to give a discount to a buyer so that they can hire a great rug cleaning service or some type of home repair guy.
I come back to marketing frequently because a lot of the expired listings that I've helped in the past didn't really interview a range of agents and they went with a friend or they went with a relative to list their property and didn't realize that there was a difference in marketing. I know that you pride yourself on your marketing and the agents in our office ... We all pride ourselves on that marketing that our brokerage offers. Sometimes it's just that ability for a seller to slow down and say, "Let's interview, because this is a really important decision, let's interview three or four different agents and see what kind of marketing is out there.
Jon: Yes, absolutely, I mean it never ceases to amaze me, I mean the primary residence is often one of the biggest assets for any household and they'll take that asset and put it in the hands of the tennis partner or the best friend from elementary school who does real estate on the side or that kind of thing. Which I certainly understand and appreciate that loyalty, I mean I have clients that are very loyal to me and I love that, but they're loyal to me with good cause.
Greg: Exactly, there's a difference.
Jon: That's just amazing. They do it in the way that they wouldn't do it if it was a couple hundred thousand dollars, their equity in the home, they wouldn't just hand that to somebody and say, "Hey, you're not a stockbroker full time but why don't you invest this in the market for me." They'll do it with their real estate which is always been surprising.
Greg: I think that comes back a little bit to real estate agents in general. It is a harder profession than a lot of people think it is and it comes back to education, on us, that we need to educate people a little bit better that a smooth and successful real estate transaction, when handled properly is, I don't want to say a thing of beauty but it's not as easy as some people would make it seem or make you think.
Jon: Complicated orders.
Greg: That's right.
Jon: Show me an easy deal, right?
Greg: That's right.
Jon: There's always something and there's a lot of competing agendas, priorities, but what's important to the buyer may not be important to the seller. Obviously they're on opposite sides of a transaction and as the agent we're right in the middle there trying to smooth it out, keep everybody emotionally intact to the degree that we can. Also, ensure a successful outcome of the transaction getting closed.
Emotional Journey Of Home Owners Whose Listings Expire
Greg: Right, and when we're talking about emotional valleys or journeys that seller is going to be on, if their home actually expires and it comes off the market, I don't know if they're ready for the next day or the next two days or the next three days, they are going to receive, if they're in a desirable area or desirable price range, just an amazing amount of mail. I've talked to a lot of people who had no idea what was about to happen when their house expired and you're going to open up your mailbox and you're going to get letters and postcards from a large number of agents because that's available information. We all get to look at the MLS everyday and see which properties came off the market without a ... Do you have any advice for home sellers when they open up their mailbox and say, "Wow."
Jon: Sifting through that. Sure.
Greg: Yeah, "I'm very popular today."
Jon: The deluge of postcards and everything? Yes, I do, I mean I would look at it like you'd look at any other professional, I mean look at the marketing pieces that you receive, I mean, you can quickly tell who actually spent the time on it. Which one is just a form postcard that gets mailed to every single house in Louisville that comes off the market and which of those did they write you a personal note, are you familiar with the agent, have they been marketing in your neighborhood already. At the point you've kind of gone through and found a couple of the marketing pieces that you think of that, "Hey, these look like they might be viable agents to interview."
Do your research on them, spend time, get on Google, look them up, look them up on Facebook, do they have a profile on all the major social media sites, are they active and not only are they active but what kind of content are they putting out there. Are they just reposting every article that comes up on CNN Money, about interest rates or are they actively engaged in the local market and really just acting like professionals.
Greg: This is to your point earlier both about marketing and knowing the marketplace. You as a home seller can look these people up who are writing you and figure out who's actually done the marketing with success and if you maybe didn't interview enough people eight months, a year ago when you sold your house or tried to sell your house the first time you can make up for that now.
Jon: You've got an opportunity there. Yeah, absolutely.
Jon: I would just keep in mind the marketing piece that they're sending you in the mail that is their solicitation, their attempt at a best first impression to get you, to gain your business as a client. If they're sending you a flimsy little postcard that they printed out on their printer at home...
Greg: That should tell you something.
Jon: Maybe that's going to tell you something about what they're actually going to do once they have you as a client and you're committed on a listing agreement term with them and they don't have to work so hard. You want to make sure you've got somebody who's actually putting together professional presentation with a personal touch too that's actively interested in marketing your specific property, not just a mass mailing that they're dropping on a hundred houses a week.
Greg: Right, and it also helps as you mentioned to find someone who might be active in your price range or your part of town, because what I found is when you pick someone that maybe is not quite as active in that area, they're going to come in and they're going to hit you with price, price, price, price. You got to lower your price by 10%. And I know you've been in this situation, I've been in this situation. If you actually know the market and you know the properties, with the correct marketing it's actually possible, sometimes it depends, right, it's sometimes possible to keep the price where it was, maybe even raise it a little bit but maybe you need a price adjustment but it's not necessarily price. Put the right marketing in place and sometimes you're amazed at the different that can make, you can take an expired listing that came off the market, leave the price alone and then put effective professional marketing in place to have a totally different result.
Jon: Not a question, I mean it doesn't happen every time obviously but there are certainly a lot of cases where we've come in and we've kept the price the same and just kind of re-positioned the property through the marketing efforts. There's cases where we've come in and done work where we've made some of those changes on paint colors and staging and that sort of thing and ended up raising the price. The answer is not always price, but you're absolutely right, that's the typical answer that they'll get from most agents. They'll send them the postcard, try to get the appointment and then say, "You just need to drop the price and I'll get it sold for you." If that was all that needed to be done they could have dropped the price with the old agent.
The goal for the seller is not to drop the price and how can we help them maximize their exit from the property by doing the marketing and making sure that we make those changes, with our professionals that we get involved to make sure that the property shows as best as it possibly can.
Greg: I guess in closing we would like to say to any seller whose had an expired listing recently, don't lose hope, maybe reach out to us, maybe we've reached out to you already. Give us a call and we can show you some marketing that I'm pretty sure you haven't seen yet and we can get your house sold pretty quickly.