7 Things You Should Know About Expired and FSBO Listings
As a real estate agent, it’s necessary to keep finding ways to get ahead of your competitors, by tapping into areas of the market that others are ignoring. One such area is that of expired listings and FSBO listings. While most agents and brokers are working on pulling in buyers and sellers the traditional way, they are forgetting listings that have already been shared with the public. If you’re willing to take a little time each day to explore expired listings and FSBO listings, chances are you’ll have less competition and you’ll find it much easier to convert leads and close on deals that much quicker.
The thing is, even real estate professionals who are familiar with expired and FSBO listings already, may still be hesitant to go down this path. After all, there’s not too much information about this side of the market. Therefore, having some tips at your disposal can help.
Here are some facts that we bet you didn’t know about expired and FSBO listings:
1) Up to 25% of Listings Do Not Sell
Most real estate agents are too busy creating their own listings or snagging a home that just went to market that they don’t pay attention to listings that have already been available to the public for a long time. According to Keller Williams, between 15% and 25% of all listings don’t sell — at least before you can get your hands on it!
There are many reasons as to why a listing wouldn’t sell, and KW says it has to do with the marketing effort, price, condition, and location, or a combination of these factors. While many of these are not within a listing agent’s control, at the very least, the marketing effort is. So, if you can find a way to make the listing more attractive to buyers than the previous listing agent, then you may have yourself a deal.
2) Up to 95% of FSBO Listings Will Fail
As agents, we definitely want our clients to be successful. If they aren’t successful, then ultimately, we don’t get paid. But, there are certain scenarios in which people being unsuccessful will actually work in your favor, and that’s when sellers can’t sell their own homes. And, it’s usually because they do not have the experience necessary to do so — precisely, the experience and skills that a real estate professional possesses.
According to UpNest, a whopping 75% to 95% of FSBO listings won’t make it to the transaction phase, and there are dozens of reasons why these sellers will eventually cut their losses and eventually list with an agent. Knowing this astounding statistic, pursuing FSBO listings as an agent is a no-brainer. The numbers are on your side.
3) The Biggest Motivator of FSBO Listings is Their Frugality
If you have some familiarity with FSBO listings, then you know these people are usually very motivated sellers. But, there are many reasons as to why a person would want to sell their home themselves without seeking the help of a real estate professional. Based on a survey by NAR reported on Parkbench.com, some of these reasons include the seller selling to someone they know like a relative, neighbor, or friend, not wanting to deal with an agent, or their agent they were using wasn’t able to sell their home.
The biggest reason of all, though? 47% of respondents said that they just didn’t want to pay an agent’s commission. So, keep this in mind when you’re trying to snag that FSBO listing.
4) Agent-Sold Homes Sell for More on Average than FSBO Homes
We know that FSBO listings choose to avoid working with an agent primarily because they want to keep as much money out of the home as they can. But, what they may not realize is that on average, the typical FSBO home sold for $200,000 while the typical agent-sold homes sold for $265,000, according to the NAR. This is a 32.5% increase.
There are many factors that contribute to this, but it may be as simple as the fact that 49% of FSBOs did not do anything to actively market the home, while 22% are still relying on just yard signs to sell. Because a good agent has the tools to successfully market a home — and, to sell it for a good price — it’s still very much a good investment for a seller to pay that commission to an agent, anyway, as they’ll still likely be taking home more money than they would if they were to sell the home themselves. Sharing this fact with your leads can help you take on those FSBO listings.
5) Expired Listings Have Much Higher ROI Lead-Generation
These days, there are so many ways for real estate agents to bring in leads, and some methods are more promising than others. With Facebook ads, other social media platforms, and direct mail campaigns, the conversion rate is in the single digits, and that’s across all industries. (Of course, that can change depending on certain circumstances).) But, in the real estate industry, the ROI relative to lead-generation investments is much, much higher, just by targeting expired listings.
As a matter of fact, HomeBloq says, “Expired listings offer the potential for high ROI lead-generation because there exists the combination of motivated seller and agent-less listing. When listings expire due to the listing agent’s inability to sell (whether through fault of their own or not), it creates an opportunity for a new agent to market themselves to the seller.”
If you’re already putting a lot of time, energy, and money into lead generation strategies that simply aren’t bringing you enough return, then it may be time to reconsider your focus elsewhere: on expired listings.
6) Older Listings with Price Reductions are Your Best Bet
Typically, a listing is active for 180 days. If it does not sell at that time, then it will expire. You already know that an expired listing is a good area of the market to focus your attention on. But, to dig a little deeper, you’ll want to fish out expired listings that are older and/or have had significant and consistent price reductions.
Older expired listings and expired listings with price reductions mean that the seller has been trying to sell the home for a long time, and they have been willing to lower the price again and again in order to get rid of it. This means they are not just motivated, but extremely motivated. So, when sifting through expired listings, take note of which ones meet this criteria.
That being said, don’t ignore recently expired listings, as those sellers may also be just as keen to not waste time and work with an agent right away. (In fact, many may even say to themselves, I’ll try by myself first, and if it doesn’t work, I’ll go with an agent.) Also, pay attention to listings that need better marketing to get noticed, as that’ll be your ticket in.
7) Finding Expired and FSBO Listings Has Never Been Easier
Seeking out expired listings and FSBO listings may be an unconventional way to go about your real estate business, but it can be extremely lucrative if you know how to go about it. However, because there is so little known about this section of the market, it’s understandable that real estate agent — even those with years of experience — would feel skeptical about going this route.
The good news is that these days, it’s very easy to find expired listings and FSBO listings. In addition to utilizing the MLS and searching for these listings on your own, there are programs out there that make the process of finding these listings and contacting the sellers that much easier. One of these programs is Espresso Agent, which gives you the data, contact information, and marketing tools to find these listings and snatch them up quickly, all within one comprehensive CRM system.
Real estate agents need to constantly find creative ways to bring in more leads and close more deals. One way to do this is by going after expired and FSBO listings. With the right information about this area of the market at your disposal, you’ll be well on your way to building a successful real estate portfolio.