When I first wrote about For Sale By Owners (FSBO’s) last week, I started with a tongue in cheek story about how agents are typically scared of, and avoid, FSBO’s. The story went on to point out that since FSBO’s typically don’t sell and end up listing with agents, the agents that ignore them cost themselves lots of business and money.
The same can be said about expired listings. Expired’s are a literal gold mine of business, especially in today’s market. I would venture to say there is no faster way to do more business than to prospect expired listings.
FSBO’s are great, and there still aren’t nearly as many as there are Expired’s on a daily basis. And, remember, FSBO’s usually take a longer time to come around and realize the best way for them to sell is to list.
Past Clients and Sphere of Influence are also great, yet 10-20% of them will give you business in some form over the course of the year, if properly prospected.
Just Listed/Just Sold calls are slightly better than cold calls, and are not a highly effective mode of lead generation.
As I mentioned in previous blogs before, advertising, floor time, open houses, sign/ad calls are not lead generation. They are sit back and wait for it business. Besides being costly (advertising), they are inefficient, at best. You can’t predict where and when the business will show up, or how well you can convert them.
Expired listings are the best for many different reasons.
1. They’ve demonstrated that they are wiling to sign a listing agreement.
2. They wanted to, or needed to sell at one point. Most likely they still want or need to sell.
3. Many of them are looking to make a change of agents.
4. You already know what price is too high (their old price that didn’t get them sold), so a CMA is that much easier for you.
5. They need your help.
I think you should spend time on all types of lead generation, however if you just spent time on expired’s every day you would do considerably more business than if you spent time on all the other types combined.
So what are some of the main reasons real estate agents don’t go after expired listings?
1. Agents don’t know they should go after expired listings. Let’s face it, the industry doesn’t really do a lot of how to sell training. They let people advertise to sell you magnetic football schedules, and they let you take classes to get some initials that the general public has no idea what they mean. They teach you all about how to buy and use the most intricate contact software there is. Yet, they don’t teach you to sell.
If they taught you to sell, they’d tell you to go generate leads, go create business, without spending money on postcards and flyers. And they’d tell you to start prospecting expired listings right away!
2. Just like with FSBO’s, many real estate agents are scared to call expired listings. They don’t know what to say, they don’t like rejection, they think expired sellers are mean or angry.
Some agents are even scared of the previous agent who had the listing. There’s no reason for that. Once a listing is expired, it’s fair game. I don’t advocate caling an expired before it expires, however when it hits the MLS, it’s anyone’s game. There is no ground for them to be angry, or for you to be punished in any way.
As far as knowing what to say, I go back to scripts. You need a good script to be a good salesperson. Email me and I’ll point your towards scripts. And, of course, if you get objections, you can always know what to say when you buy any version of our book, Now What Do I Say?…ebook, book, audio book or live role play CD. We have a section dedicated to expired seller objections.
3. They think the competition is already calling. Yes, it’s true, a very small percentage of your competition is calling expired listings. I promise you it’s not as many as you think. However, if you have a problem measuring yourself up to your competition…enough of a problem that you’d rather not even try to compete with them…you’re either in the wrong business, or you need to get some coaching and training right away.
Email or call me and I’ll give you a free consultation to help you along. I truly believe that if you want to, and you practice, you can be the Expired Maven of your market.
4. What’s the use? They’re going to re-list with the same agent anyway. – That’s not necessarily true, my friend. But it’s a hell of a story to tell yourself so that you don’t call them.
Yes, some expired sellers do end up re-listing with the same agent. And the vast majority change agents. If you have the time, study your MLS for about 30 days and note the number of expired listings that re-list vs. the number of them that change agents and/or stay off the market. You’ll be surprised at how few sellers stay with their same agent (especially in this market).
The reason is frustration and lack of communication. In a previous post about client communication, I mentioned that most agents stop communicating with their clients after a few short weeks or months when the home doesn’t sell or get showings. They’re scared. They have no news or bad news. They’re afraid to ask for price reductions. So, they just stop calling.
Many expired sellers report that their previous agent disappeared. In fact, many expired sellers don’t even know they’re listing expired until you call them. Their previous agent was so scared, he/she didn’t even bother to call to try to get them to re-list or extend the listing.
So, be the agent that saves the day and sells their home!
If you truly don’t want to prospect expired listings, then before you make your final decision (stupid as that decision is), do this simple math equation:
Average monthly number of expired listings x 10% (to be conservative you’ll set appointments with 10%)
Divide that number in half (you should get 50% of the listings you go on appointments for)
Multiply that number your average commission check
Mulitply that number by 12
That’s how much money you are throwing away each month, and all year, if you choose not to go after expired listings, based on very conservative numbers. And that doesn’t even consider all the referrals you’ll get from them, and the fact that they’ll be past clients and give you more business over the years.
Go get them!!
Next post, I’ll talk about how to list and sell expired listings.