April 2015 | By Mary Beth Klatt
Expired listings can be a tricky source of new business. When another agent couldn’t get a property sold, should you step in and try to take the listing yourself? It’s a practice that some look down on because it’s often construed as stealing the original agent’s business. But if you do it the right and ethical way, it could be a great avenue for new agents to build their client base.
It is a violation of the Code of Ethics to solicit a seller who is already bound to an exclusive listing agreement with another agent. When a listing expires, any agency contract the seller is subject to presumably ends. But double-check before making a pitch for the seller’s business. If, in fact, the agreement is over, then you can solicit the seller.
There are a couple of reasons rookie agents should consider doing this. For one, expired listings are a way to identify people who are still in need of real estate services. So if you’re looking for clients, here’s one way to find them. The owner of an expired listing is also likely unhappy with their original agent and could be convinced to give another professional a shot. Kelli Shanks, associate broker at Exit Realty Bend in Bend, Ore., learned those benefits when she mined her MLS for expired listings in early 2012, eventually landing one worth more than $500,000 that had expired with a top-producing agent.
As part of a workshop, Shanks’ principal broker, Jim Mazziotti, challenged her and other agents to knock on the doors of expireds on New Year’s Day that year. Mazziotti promised a $500 bonus to anyone who secured just one listing on that holiday.
“So I looked over the list and found one especially nice home that had expired on this snowy and cold New Year’s Day,” Shanks says. “‘I can do this,’ I said to myself.”
That morning, Shanks drove to the city’s prestigious Awbrey Butte neighborhood and knocked on the door of a two-story, four-bedroom home. The owner, as it turned out, wasn’t immediately ready to try his hand at selling again because he was still disappointed that his home didn’t sell the first time around. But Shanks discovered a few tactics that helped win his business.
- Show your follow-up skills. Shanks says her prospect didn’t even know his listing had expired because his previous agent didn’t inform him. It’s fairly common, she says, that behind an expired listing is poor communication between agent and client. So if you’re trying to get an owner to relist with you, good communication is paramount. Shanks’ prospect told her that she contacted him more in a week than his previous agent did in six months. Because he was discouraged by the experience with the first agent, “it took a few months from the time I knocked on the door for him to list with me,” Shanks says. “After repeatedly reassuring him that that was not the way I worked, he finally gave me a chance.”
- Demonstrate your faith in the sale. Owners of expired listings may have lost confidence in the ability of their property to sell. So if you want to convince them to relist with you, you need to show them your belief that it will sell. That starts with choosing expireds you actually do believe in. Shanks chose her prospect because his home represented a part of the market she always wanted to get into. “It was exactly the kind of high-end home I wanted to list and at a price I wanted to expand my business into,” she says. “Having some knowledge of how the agent had marketed the home, I knew I could provide a marketing package that would get this home sold.” Shanks assured her prospect that the four-bedroom, three-and-a-half-bathroom house with a three-car garage would be appealing to buyers. Getting neighbors aware of the listing would be critical. She later walked door to door, passing out 200 flyers.
- Be prepared to fend off objections. Even if you’ve got all the right talking points down when you approach an owner of an expired listing, it may take a lot of convincing before they’re willing to work with you. Shanks’ prospect needed reassurance that she wouldn’t neglect communication the way his previous agent did, but he also worried about Shanks’ lack of experience. In her first year as an agent at the time, she noted that her principal broker had more than 20 years’ experience and would be guiding her along the way. Shanks also gave her prospect a written performance guarantee with nearly 20 points underscoring what she would do to get the property sold, including always returning his phone calls.
It turns out that because she didn’t sign the owner that first day of January 2012, Shanks didn’t clinch Mazziotti’s $500 offer. But Shanks eventually got something even better. She was able to secure the listing nearly nine weeks after her presentation, close on the property, and convert a very disappointed home owner into a lifelong client who recommends her to others and points out how her professionalism may also help them.
Tenacity is paramount when pursuing expired listings. “The most important advice I could give would be to be professional in your attitude and the way you dress,” says Shanks. “Make sure that you follow up consistently, and do what you say you’re going to do.”
Reprinted from realtor.org, April 2015, with permission of the NATIONAL ASSOCIATION OF REALTORS®. Copyright April 2015. All rights reserved. http://www.realtor.org/