Expired Lead Generation and Management Systems for Real Estate Professionals
Are you a Real Estate Agent looking for more leads?
Has the changing Real Estate Market had an impact on your business?
Have you ever considered working at obtaining expired listings, but haven't found an effective & efficient way to work that type of a lead?
Call Expired Real Estate Leads at (949) 334-REDX (334-7339)
Lead Generation is an important aspect of a profitable real estate business. Since lead generation can cost a great deal of your time and efforts, it is important that the group of potential clients you go after is responsive to your offer.
With the current shifting real estate market, more and more properties are taking much longer to sell. Most agents neglect the seller in time and the result is that the disgruntled homeowner will do anything rather than re-list with the same agent. With the market being so slow now, it is in fact, the best time for you to perfect your expired listing lead generating processes and techniques, to avoid the same issues.
As a real estate professional, you need to be working on expired listings. Such listings are becoming more common and available due to the changing real estate economy and an inability on the part of agents to stay ahead of trends. The best way to get those expired leads is through REDX Prospecting Solutions. REDX is changing the way real estate professionals approach prospecting by providing them innovate solutions integrated with the Expired Leads research, the For-Sale-By-Owner (FSBO) lead service and the REDX lead manager into a powerful real estate tool.
Call Expired Real Estate Leads at (949) 334-REDX (334-7339)
Remember, the expired listing is going to be bombarded with calls from other agents who are also trying to get the listing. It is very important to build rapport with the seller and to set an appointment. Once you are sitting with them, you will be better able to explain how you can help them get their home sold.
If you are using these scripts on the phone or even at their front door, always try to set an appointment to present your listing presentation when all decision makers can be present for as soon as possible. That same day would be great.
These are only some of the objections my coaching clients have received in the past few weeks. These are the responses we came up with to learn and use to handle those objections and questions. What kinds of objections and questions are you getting? Submit your question here http://www.prorealestatecoach.com/pages/contact-us.htm and we will get back to you on a specific response as well as include the best questions on a future Scripts posting.
They say: “If I can’t get $xxx,000 for my house, I can’t afford to sell.”
You say: “I understand your concerns. Have you looked at what you will net if you get that amount? Let’s take a closer look at the numbers including what it is costing you each month that you don’t sell and have to pay for expenses with the property. Could I stop by and explain those numbers to you later today?”
They say: “How come you did not sell it while it was on the market before?”
You say: “With the current market we are in, there are so many houses that are similar on the market. In order to get your house to stand out on the Multiple Listing System that agents use to search for available houses for their buyers, it is important to market it so that it stands out among the rest. Can I share with you how I market homes differently on the MLS than I do for potential buyers in, say, the newspaper? Can we meet later today?”
They say: “Can you send me some information on your experience first.”
You say: “I would be happy to get you a brochure and some information on how I can help you get your home sold. I would hate for you to miss any time on the market, however. Can I drop it off with you this evening? That way you can get your home listed again as soon as possible. What time is best for you?”
They say: “Have you ever sold a house in my neighborhood?”
You say: “Even though I have not sold a home in your specific neighborhood, my marketing philosophy is to really market the home’s strengths. I believe one of your homes strengths is being in the (insert neighborhood name) and it’s proximity to the elementary school. What do you think are your home and neighborhood’s best features? I would love to show you how I’ll fit those strengths into my marketing materials. Can we set up a time for me to come over and explain my marketing plan later this evening?”
They say: “How about if we just list it with you for a month and try it out?”
You say: “With today’s current marketing conditions, it is taking longer for some properties to sell with the competition on the market. Let me explain the marketing plan I would use on your property and explain what I would be doing in the first month as well as the next months after that. I am sure you will be impressed. “
They say: “I am frustrated that our house has not sold yet.”
You say: “I understand your frustration. With the changes we have seen in the real estate market over the past year, the average days a home is listed on the market has increased. One thing that I offer is an updated market analysis on a regular basis to make sure we have your home listed at the right price even with new homes selling and new properties being listed in competition with you. To help ease your frustrations, how often would you like to receive this information while your house is listed?”
They say: “I don’t think our agent did their job.”
You say: “I am sorry you feel that way. I know your past agent and he is a good agent. However, what would you want from your next agent that would make it a better experience?”
They say: “My last agent was not able to sell our house in 6 months, what makes you think that you can?”
You say: “I know it is frustrating that it is taking longer to sell your home than you anticipated. I have a marketing plan that has helped me sell (insert your numbers) % of my listings and my average days on market is (insert your numbers.) What do you think would help your home sell more quickly?”
They say: “My last agent did not do much to sell my house. I think I am going to try it myself.”
You say: “I can understand your frustrations. Sometimes it seems like it would be easier to sell it yourself because you don’t see what your agent is dong to promote your house to the other agents in your area. Can I explain what I do to promote your house in the MLS and to other agents?”
We are all different. Why shouldn’t our Expired Listing Plan be different?
In the past, I have taken some time to talk about how to adjust a generic Expired Prospecting Plan to make it fit for your area in my article A Tale of Three Agents. I reference them in this article so click here to read that article first.
The next way I encourage you to adjust an Expired Plan after you have adapted it to fit your Market Area is by customizing it to fit your STYLE.
When I say style, I mean Behavioral Styles. All of the clients I work with are given a DiSC Profile. This helps me as a coach to understand who they are and for the Realtor to understand and build off their strengths.
I am sure many of you are familiar with DiSC, but if you are not or would like more information, log on to www.DiSCForRealEstate.com and click on the “What is DiSC” tab.
I am going to give a very brief overview before going on to explain how my clients have adapted their Expired Programs to fit their styles.
The DiSC® model provides nonjudgmental language for exploring behavioral issues across four primary dimensions:
Dominance: Direct and Decisive. D’s are strong-willed, strong-minded people who like accepting challenges, taking action, and getting immediate results.
Influence: Optimistic and Outgoing. I’s are “people people” who like participating on teams, sharing ideas, and energizing and entertaining others.
Steadiness: Sympathetic and Cooperative. S’s are helpful people who like working behind the scenes, performing in consistent and predictable ways, and being good listeners.
Conscientiousness: Concerned and Correct. C’s are sticklers for quality and like planning ahead, employing systematic approaches, and checking and re-checking for accuracy.
Most agents I work with usually come up with a primary and secondary style.
Many agents come up with High “Ds” as one of their two highest styles. Although being a High D is great when it comes to running a team, or closing a buyer, it can be intimidating to prospects early on and can be perceived as being pushy. In this case I encourage them to turn down their”D” and concentrate on the other highest style.
Remember the three agents I told you about in A Tale of Three Agents? They were the City Agent, the Suburb Agent and the Rural Agent? They all have different styles.
Based on what I told you about the City Agent’s Expired Plan, can you guess what style he is? Remember:
He is on the phone calling Expired Listings every day from 9:30 am to 10 am without fail. His intention with the phone calls is to see if the homeowner is still interested in selling their home and to make an appointment to come out, that day if possible.
After making phone calls, setting appointments and talking to those that are home; this City Agent then spends 30 minutes making up packets to drop off at the homes that he was not able to talk to.
City Agent is a High C.
Conscientiousness: Concerned and Correct.
C’s are sticklers for quality and like planning ahead, employing systematic approaches.
He does the same thing at the same time everyday without fail. He is very accurate, very precious and a very good agent.
How about Suburban Agent? What style do you think she is based on the way she adapted her Expired Plan to fit her style as well as her market area. Remember she is the one that:
Uploads the picture, creates the card that then is printed in her handwriting and sent that day. She then sends out a post card through the same system 3 days later and another card 3 days after that. She continues with cards weekly for four more weeks and then puts them on a monthly card and postcard campaign which is automated through this system.
Suburban Agent is a High “S”
Steadiness: Sympathetic and Cooperative.
S’s are helpful people, performing in consistent and predictable ways, and are good listeners.
She created a system that she can put in motion that seems to be very personal, but is totally automated.
So how the marketing person for Rural Agent?
Remember the marketing person:
She has a number of different scripts to use when she calls, but she never uses them. She was born and raised in the small rural community and knows most of the people (or some mutual acquaintance anyway!) in the tri-county area. She just calls them starts to chat with them, builds report and sets the appointment for the lead agent.
She chats with the neighbors when dropping off packets and even gets listing appointment through the neighbors who she builds report with.
She is probably the biggest “I” I have ever met
Influence: Optimistic and Outgoing.
I’s are “people people” who like energizing and entertaining others.
She has really put her natural gift of gab to work!
Which of the four styles do you think best describes you? How can you customize your Expired Plan so that it will really play off your strengths?
I run come across so many agents that are trying to fit into molds and read scripts and send letters that is not who they are. Trying to do this business like someone you are not is not going to allow you to reach your full potential. Who are you and how can you create your business around THAT style.
I also want to touch on just briefly is how to customize your Expired Plan to fit the style of your prospects.
I just outlined for you the four DiSC Styles and encouraged you to draw from your strengths. I also encourage you to adapt your style to better relate to your prospect’s style.
Now I don’t want to confuse anyone so let me clarify that a person’s style is not influenced by if they live in the city, the suburbs or a rural area. You cannot assume that because your prospect lives in a certain neighborhood and that your accountant lives in that neighborhood, therefore all people in that neighborhood must be High “Cs” You must not generalize like this.
If, however, you call someone on the phone or meet them when you drop off a packet, pay attention to what people say and how they say it.
Do they talk fast and vibrantly?
Are they more systematic in their responses?
Are they very precise in their answers?
If you are a High “I” and talking loud and fast and the prospect on the other side of the door or telephone is slower speaking, more exact in their word choice, how much rapport are you building. While I encourage you to be yourself, I also encourage you to tone down extremes if you don’t seem to be connecting with people.
People Reading can be one of the most effective sales tools I work on with my clients. Using the DiSC Styles in People Reading is beneficial whether you are working with Expired Listings, FSBOs, sellers, buyers, everyone. To build rapport, it is import to listen, observe and adjust your presentation in order to build rapport. Remember, it is about them, not all about you.
When you as a Real Estate Agent adapt an Expired plan to your Market Area, you need to adjust that plan to fit “where” you are working expireds.
Before I give you examples of three clients that have modified Expired Plans to meet their areas, I want to make sure everyone is clear on what the goal of working expired listings is: “getting the listing appointment.” Now, actually getting the listing at a marketable price and then selling that listing are two other articles, but here we are going to be talking about “getting your foot in the door.” I have three clients in total different market areas that use three totally different approaches.
The City Agent
The first Realtor is located in the city. He uses the ExpiredRealEstateLeads.com program to locate the Expired Listings every morning. (Let me stress how important it is to work Expired Listings daily. It is crucial to contact them right away. A large percentage of Expireds will relist immediately. If you are only working Expireds on say a weekly basis, you will not be able to get your foot in the door simply because you are too late.)
This City Agent works Expireds in areas that he farms and is very familiar with. There are also a very large percentage of homes in his area that ARE NOT on the Do Not Call list. This agent is on the phone calling Expired Listings every day from 9:30 am to 10 am without fail. His intention with the phone calls is to see if the homeowner is still interested in selling their home and to make an appointment to come out, that day if possible.
After making phone calls, setting appointments and talking to those that are home; this City Agent then spends 30 minutes making up packets to drop off at the homes that he was not able to talk to. In these packets he includes some marketing materials about himself, some market update information about the current conditions in the area in their price range, and personal letter about why he wants to list their property and why he thinks he can sell it.
Between 4-5 pm, this City Agent then drops off these packets hoping to run into home owners that are getting home from work. Because traffic and parking are an issue and his market area and neighborhood are condensed, he creates a plan and walks the packets to the front doors of the 4-5 Expired listings for the day.
Now there is continued follow up that he does if he is not able to get an appointment right away, he will follow up two days later with a phone call to make sure they received the packet and weekly phone calls for the next two weeks along with one other mailing that first week and then weekly mailings for the next five weeks.
Using this approach gets this City Agent 3-4 listing appointments a week and 1-2 sellable listings.
Would this kind of approach work in your area?
The Suburban Agent
The second client I am going to tell you about lives in an upper middle class suburban area in the Midwest. This Suburban Agent’s area is very different than the first one I told you about. 99% of the homes are on the Do Not Call List and calling just is not something that works for her area.
Many of the neighborhoods have a no soliciting policy and even if they don’t have a formal posted ordinance regarding door knocking, it is something that is frowned upon and not something that works in her area.
This Suburban Agent also looks up the Expireds through ExpiredRealEstateLeads.com daily, but what she does is makes a list of the homes and drives by them taking a picture of the front of the house.
Because so many agents are sending the same thing, including information about themselves and the company and a standard cover letter, she has found the way for her to stick out is to send a greeting card in an envelope that is personally addressed to the homeowner.
The greeting card is in an envelope that gets opened and the card has a photo of their house on the front. On the inside is a handwritten note that is personally addressed to the homeowner that says simply “I want to sell your house, and I think I can. I know you will be getting a lot of mailings form numerous other agents, but I would love to meet with you to show you why I am different. Please call me so we can set up a time to meet. I look forward to meeting you.” And she signs her name and includes a copy of her business card.
The Suburban Agent uploads the picture, creates the card that then is printed in her handwriting and sent that day and it costs her less than a dollar, plus the cost of the stamp.
Now, like the City Agent, this Suburban Agent doesn’t just make that first initial contact and leave it at that. She sends out a post card through the same system 3 days later and another card 3 days after that. She continues with cards weekly for four more weeks and then puts them on a monthly card and postcard campaign which is automated through this system.
A couple of years ago in her area it would have been considered a waste of money and time to continue to follow up with this lead for a year. However, she has found that many homeowners in her area have decided to pull their home off the market for a period of time before putting it back on the market. This Suburban Agent is going on 4-6 listing appointments a week and over half of them have been expired for over 3 months.
Would this kind of approach work in your area?
The Rural Agent
The last client of mine I want to tell you about today lives in a rural area in the North West. This Rural Agent has actually hired a marketing person that gets compensated just for getting listing appointments. That is her only responsibility on the team five days a week and she rarely goes a day without getting at least one listing appointment, usually it is 2 or 3. That is 10-15 listing appointments a week.
How many of you on the call are drooling over the thought of having someone else doing all of your prospecting so all you had to do is go out and do the listing presentation and sign listing agreements all day?
Like I mentioned, she does this in a rural area so door knocking would definitely not work in this area. Because she is such a high volume agent in a sparsely populated area, she does cover several counties in order to hit her production goals.
Now the marketing person on this team has a number of different scripts to use when she calls, but she never uses them. She was born and raised in a small rural community and knows most of the people (or some mutual acquaintance anyway!) in the tri-county area. She just calls them, starts to chat with them, builds rapport and sets the appointment for the lead agent.
If she is not able to reach the people by phone, she begins compiling a packet that again includes information about the team, a sampling of the marketing materials they use and a personal handwritten note to the seller.
This person then maps out the homes that Expired that day and right after lunch, begins to drive to each of the homes she was not able to talk to that day and personal drops off a packet. Again, her hope is to run into the seller and set that appointment. She has even received calls to set up listing appointments after she has run into the neighbors while out there, chats with them for a while and ends with a half joking remark to the neighbors telling them to encourage the sellers to call them if they are serious about getting their home sold. She even gets the neighbors working for her!
Again, she has a follow up plan in place to follow up the next day with a phone call to make sure they received the information, another mailing 3 days later, and again three days after that. Weekly calls and mailings for the first six week if the property does not relist or they inform her they would like wait for an extended period of time and then she just puts them on her monthly Lead Farm Mailing after that and never takes them off. She figures they will sell someday and if not, she has enough rapport with them after the personal contact that she might get (and has gotten) referrals from them.
How many of you think this type of approach might work in your area?
I gave you examples of three very different areas. I tried to choose areas that would represent the majority. But if I didn’t describe your area, what could you do to a standard marketing plan that would make it fit your area better?
I work with an agent that works in very elite areas that have household help that open their mail for them and discard any junk mail. She also uses the personal greeting card system with a very short personal handwritten message inside.
I work with agents in resort and second home markets that have owners that live in other states. Most of their contact is done through high quality mailings.
I have another agent in a very high tech area so his mailings direct them to his website where most of the expireds decide to email him and set up a listing presentation.
What might work in your area? Take out a piece of paper and take 20-30 seconds to describe your market area and list one thing that you might want to try in your market area.
I am a real estate business coach. I have worked with hundreds and hundreds of clients over the past 7 years, and, you know what? Something has changed with most of my clients’ businesses over the past few years. My guess is that if you are a real estate professional, this is also true to some extent for your business as well.
I will tell you one other thing about many of my clients; most of them are exceeding their goals and many are having their best years yet.
They are in all different types of markets. I have clients in markets across California that have had 30 percent decline in values and record breaking foreclosure rates, and clients in areas of Tennessee where Days on Market are just now beginning to creep up there and everything in-between.
I have clients in many different areas across the United States. I have clients in the Midwest, clients on the West Coast, and clients on the East Coast.
I work with agents that target many different price ranges and niches of clients.
I work with agents that are solo agents; I work with agents that have mega teams, agents that have been in the business less than two years and agents that have been in this business for over 30 years.
Most of my clients have been successful over the past year because they have really learned to do one thing extremely well. Work Expired Listings. Now three years ago, most of them where having success because they mastered working FSBO Listings, but they all really had the pulse of their markets and shifted their focus early and deliberately to Expired Listings.
I will be sharing with you over the next few weeks what I shared with the participants of that TeleSeminar.
What I am NOT going to give you over the next several weeks is scripts and dialogs of what you need to memorize to say or what to send to potential listings. Most of you already have a “plan” or “scripts” or ”letters” you picked up from a speaker or a book, or from your expired system or from the Top Producer Library. If you don’t, you need something to start with. Go to Realtor.org and look up the article titled Prospecting Plan for Expireds. There is a copy of that article posted on the Tips Page at ExpiredRealEstateLeads.com.
What I AM going talk to you about over the next few weeks is how to take that plan from NAR, or one from another source, and adapt it to fit
Your Market Area
Your Individual Prospects
I am sure you enjoy the stories over the next few weeks of
The real estate market is slower right now and more and more home sellers who want and need to sell are not doing so as quickly as in the past. This means there is a bigger pool of potential clients in the expired listings that pop up every day.
The best place to find your Expired Listing Leads is through a program that will check your MLS System, double check them to make sure they have not been immediately re-listed, cross-reference them with the local tax records, find owners’ names and contact information including telephone numbers, and then check those numbers against the Do Not Call List. Now, this can all be done by your administrative assistant, or by you, but that would be an extremely time consuming. It is best to use a service like the one at ExpiredRealEstateLeads.com
Your assistant can get the list - and apply a preset action plan - and even do the mailings to the Expired Listing, however, an experienced agent or team member that is experienced at calling leads and setting appointments must also be involved. Once the appointment is set, the agent do the listing presentation must be good converting that appointment to a signed listing contract. Chances are, you will be in competition for this listing and the potential client has already had their house listed for a period of time and they are clearer on what they want to see from their new agent.
The expired real estate listings you are going after will be in the Farm areas you work, in the areas and neighborhoods that are selling the quickest in the current market in your area, and in the price ranges that are currently selling the quickest in your current market conditions. It is imperative that you stay extremely updated with these ever changing market statistics in order to best direct your efforts.
You need to contact expired listing leads immediately and continuously. This means your first contact should be the day the property comes up as expired. Many expired listing leads will want and need to get their house back on the market as soon as possible. It is also important to note that there will be a multitude of agents contacting this lead on the first day or two after it expires. For those leads that take time to make up their mind in who they will relist with, it will be important to have continued contact that lessens in frequency of contacts over the next days, weeks and sometimes even months ahead.
A combination of phone calls, mailings, drop-bys and even emails when that information is available. Different people respond differently to different forms of contact and you are never sure which one will be the best method for this lead.
Remember, the goal of these contacts is to get the appointment and eventually the listing!
With the average days on market up in many markets across the county, more and more Expired Listings are showing up on a daily basis. Expired listings are a great lead source, but only if you have a plan to work locate, follow up with, list at an appropriate price and then market properly so that it will attract buyer leads and then sell.
You can find Expired Listing on your local MLS system, or you can use a program like that one outlined at www.ExpiredRealEstateLeads.com that will do much of this initial research.
Then what? We will be talking about that in the weeks to come. Below you will find some information from NAR. What do you think about this plan? How would you modify it to fit with your market? Your style? Send me your comments and we will review that next week.
Use this plan as a basis for prospecting for expireds. Add other successful strategies you have tried as you learn more about what is most effective in your market.
Locate Expireds You should spend 30 minutes each morning, as early as possible, printing out a list of expired listings from the MLS.
Focus on expired properties in your market area or that you feel have a strong market appeal because of price or features.
Keep track of how long properties that you consider particularly salable have been on the market. If you learn that a listing is about to expire, offer a referral fee to the listing salesperson to let you negotiate a new listing with the seller prior to expiration. This gives you the inside track.
What other lead sources for expireds have you found helpful?
Develop a Tracking System You often will need several weeks of contact before you can convert an expired to a listing. Once they’ve had a bad experience with another real estate practitioner, expireds may not be immediately receptive to a real estate practitioner. You will need to demonstrate to them why you’re different than their prior salesperson.
Your tracking system should include:
Name, address, and phone number of expired
Information on the property from the MLS, including previous list price, and, if possible, days on the market.
Date that the listing expired and previous salesperson.
Date, time, medium of every contact, and response with an expired, in chronological order—for example, phone call at 9 a.m. on 9/14, offered free comparable market analysis. If you do mailings or e-mails to expireds, be sure to include those contacts in your tracking system.
Other tracking information you’ve found valuable:
Develop a Solicitation Schedule Although expireds are usually sold on working with a real estate salesperson, a bad experience with their previous real estate associate may make them distrustful of your promises. Keep this in mind, and focus your solicitation on providing consultative services that emphasize your past successes.
Week One On the day the listing expires Mail, or better yet drop off, a marketing package. If possible, do something to make your marketing package stand out from the many others an expired is likely to receive. Options include, sending it in a colorful or oversized envelope, adding a special delivery or personal/confidential stamp, or hanging it on the door in a plastic bag preprinted with you name and a drawing of a house.
Later that week Mailings: Send a follow-up letter or postcard if you don’t get an appointment. Again, provide a supportive message, such as “Sometimes, even a great home doesn’t sell right away.” Also include a statistic noting what percentage of your listings sell in 90 days or less.
What other techniques have you used for making initial contact?
Week Two Recheck the MLS to be sure that the home was not re-listed. Also drive by the house and look for a sign. Be alert to the possibility that a frustrated expired might become a FSBO.
Mail another marketing letter, emphasizing your success rate in selling listings in 90 days or less. Include information on any recent sales near the expired’s home, to subtly reinforce the going price range for the area.
Other techniques for maintaining contact:
Recheck the MLS to be sure that the home has not re-listed.
Phone calls: Follow up to ensure that expired has received your service package. Use this opportunity to ask if you can come over and see the house so that you can keep your buyer clients informed of everything available in the neighborhood. Low-traffic times at open houses are a good time to make expired follow-up calls, suggests author Danielle Kennedy.
Buyer interest: If you have an appropriate customer, call expireds and ask if they would be willing for you to show the house to a buyer.
Other techniques for getting your foot in the door:
Week Four Recheck the MLS to be sure that the home has not re-listed. Drive by and check for a yard sign.
Listing presentation: If you’ve gotten an appointment and the mood is right, present a prepared listing agreement during your visit for signature. As an alternative, promise the expireds that you will complete a marketing plan of the property within 48 hours for their review. Present the plan, then ask for the listing.
Final letter: If you’ve been unable to get an appointment, send a final letter asking expireds if their interest in selling their property has waned. Enclose a personal marketing brochure and suggest that they keep it for future reference if they later decide to list again.
If you own a residential property that is declining in value, here are some ways to make the losses less depressing.
Trim property taxes. If a house has lost value, have it reappraised by the municipal assessor. Consider petitioning — or even suing — to get back taxes overpaid in the last few months.
Deduct a home office. Some people avoid the home office deduction because it requires deducting depreciation, but if the property has lost value, this isn’t an issue.
Sale-leaseback with a relative. If you're convinced your property is due for a big price correction and you have equity in the home, then sell now. For example, if you have a $1 million home that has been appraised at $1.8 million, you can sell it and take home $500,000 of the $800,000 gain tax free — due to an exemption on profits from the sale of personal residences. Sell the property to a trusted friend or wealthy relative and then become a tenant and pay the buyer rent at market rates — a much more attractive amount than Treasury bonds are paying now. When the housing market corrects, buy the property back.
Invest in housing futures. The Chicago Mercantile Exchange sells investment instruments that trade based on house price indexes for each of the 10 largest U.S. cities. You can sell futures, buy puts, or sell calls on this market to hedge losses in the value of your home.
Up for a game? If you can deduce why FSBOs want to go it alone, you’ll be more likely to win their business.
BY ROBERT FREEDMAN
Watch TV game shows, and it’s hard not to wonder what goes on in the minds of contestants: Why isn’t he giving the obvious answer? Why doesn’t she take the money and run?
When the game is trying to capture FSBO business, it actually pays to spend time trying to get into the prospect’s head. FSBOs aren’t all cut from the same cloth. They have different motivations for wanting to sell without an agent. How you respond to their beliefs about the value of real estate agents and the cost of representation can have a direct impact on your bottom line.
“I make understanding why they’re going without representation a big part of how I approach them,” says John Maloof, sales associate with Century 21 Grande in Harwood Heights, Ill.
Look for clues about whether money, control, or another factor drives an owner’s desire to remain unrepresented. For example, owners who price high may just be testing the market. They may not want to sign a listing agreement because they’re not really motivated to sell. On the other hand, if the owners are pricing low to sell quickly, money is likely the concern because they don’t want to further deplete an already low price.
Money is probably less of a factor for sellers who’ve sold homes on their own before; they likely enjoy retaining control and may believe that representation isn’t necessary. And sellers who complain about the bad job the last salesperson did are probably worried less about spending money than they are about getting their money’s worth.
Once you know the why, you can tailor your marketing and listing presentation accordingly.
It’s the Money
A majority of unrepresented sellers (51 percent in 2006) chooses the FSBO route to avoid paying a commission, according to NAR data. Practitioners put the number even higher—some say 80 percent or more. “It’s always about the money, no matter what they say,” says Howard Gottlieb, associate broker of Keller Williams Real Estate in Langhorne, Pa.
To identify whether money is the sellers’ primary motivating factor, ask if they’d be willing to pay a commission if a practitioner brought them a buyer, suggests Maloof.
“If you ask them this, it eventually leads to what their motivation is,” he says. Many FSBOs will respond to Maloof’s question with something like, “The reason I’m going FSBO is because I don’t want to pay a commission.” Or they might say, “I don’t mind paying the commission; it’s the bad representation the last time I used a salesperson that bothers me.”
To show sellers that they’re being penny-wise but dollar-foolish by focusing on the commission, Maloof says he relies on 2005 NAR data showing that homes sold by practitioners fetch 16 percent more than those sold by FSBOs. The 2006 data shows an even greater difference for those who start out with an agent (see “FSBOs earn less on home sale,” page 32).
“FSBOs often end up showing a home to such a small universe of buyers that they don’t realize how much more they could get if they exposed the property to all the interested buyers out there,” he says.
Showing FSBOs the higher price they could realize with representation is especially important for sellers who are upside down on their mortgage and fear that having a salesperson involved in the transaction will mean coming to the closing table with their checkbook.
“These sellers don’t think it’s worth it for them to add in the cost of a commission until you show them how much more money they can get,” says Bruce Hackel, GRI, an associate with RE/MAX South Suburban in Flossmoor, Ill.
In many cases, friends or neighbors who had a successful experience going it alone persuade sellers to go without representation. “Their neighbors say, ‘We got $10,000 more as a FSBO than the house down the street,’ so they think they should do it, too,” says Chad Dion, a sales associate with RE/MAX Preferred in South Burlington, Vt. “What the neighbors don’t realize is [their] house might have actually sold for $25,000 more with the proper representation. Many sellers just don’t put a lot of value on the market knowledge we bring to the transaction.”
Qualified practitioners know the subtle pricing adjustments based on condition, neighborhood, comparables, and other market factors that can alter a home’s appeal to buyers, says Dion.
To attract money-sensitive sellers, Dean Nikodemski, GRI, broker-owner of Carolinas Real Estate in Charlotte, N.C., offers a graduated commission rate. The rate is based on the listing price, but the scale is lower than what he typically charges a non-FSBO customer.
“Once they see how much it would cost them to pay any cooperating broker who brings them a buyer, it becomes clear they’re not paying that much more to get professional representation on the listing side,” he says.
It’s About Trust and Control
Although money matters to every seller, keeping control of the transaction is another major reason sellers go the FSBO route. According to NAR data for 2006, about one in 10 FSBOs either wants to avoid contact with salespeople or feels dissatisfaction with a practitioner who couldn’t sell a home.
“After a bad experience, they want to know what’s going on,” says Dion.
Converting these disgruntled sellers means identifying the cause of their dissatisfaction, then showing how you can give them the help they need.
Maloof recently converted an unrepresented seller whose previous listing agent had failed to sell the home. He started by demonstrating where the first agent went wrong. Using a copy of the old MLS listing, Maloof walked the sellers through the previous salesperson’s mistakes, thereby demonstrating that he could manage the listing competently.
“The listing was described as a 2-bedroom when in fact it was a 3-bedroom; it included only one photo; and the cooperating commission was very low. I had the listing right there in my hand as we talked and I asked the owners if they knew any of this, and they said no,” said Maloof.
The mistake on the number of bedrooms was particularly damaging because buyers looking for a 3-bedroom home wouldn’t even see the couple’s house in an online search.
Disgruntled owners such as this are often easier to work with than sellers who are solely motivated by a desire to stay hands-on no matter what.
“Those who want to stay hands-on are very high-maintenance clients,” says Dion. “You’ll have a very tough couple of months if you end up listing their property. I won’t even work with them at this point, but it took me 10 years to learn that.”
Nikodemski lets control-oriented FSBOs know they can ask questions of him or other professionals with whom he maintains a relationship (including an attorney and a lender) for free. Of course, if sellers decide to use any of their services, the professionals charge a fee.
After their initial distrust, buyers gradually see Nikodemski as an ally rather than just another practitioner trying to get them to sign a listing agreement. Even if a particular owner remains unrepresented, the positive feelings this consultative approach creates may lead to referrals.
It’s About Already Having a Buyer
Perhaps the hardest type of FSBO to convert is the one who already has a buyer—or thinks so. In 2006, 22 percent of FSBOs successfully sold to a friend, neighbor, or family member. Another 12 percent had been contacted by an unsolicited buyer.Hard doesn’t mean impossible. Many FSBOs who think they’re all set to go learn the hard way that an expression of interest does not a transaction make.
“Nine times out of 10, their ‘friend’ doesn’t purchase the home,” says Jason L. Penrose, CRS®, GRI, an associate broker with Melcher Agency Real Estate in Phoenix. “Then these sellers are left trying to market their properties alone.”
“Sellers have an unrealistic expectation about how people behave,” agrees Hackel. “People say they’ll look at the house but don’t show up. Or they make promises and never call back.”
For this group of FSBOs, focus your presentation on the money they’re leaving on the table by not exposing the property to market forces. “If you’re selling to your neighbor, usually you’re selling too cheap,” says Maloof.
You also want to alert them to the risks of selling to someone with whom they have a relationship.
“I advise them that having me as part of the process helps limit the chances of the transaction going sour and putting them at risk of a lawsuit and a damaged relationship if their buyer is dissatisfied later,” says Penrose.
Even if the transaction seems likely to close, you can offer your expertise in handling the hundreds of details needed to get to closing. NAR’s 2006 survey found that handling paperwork was one of the two biggest concerns for unrepresented sellers.
“It can be scary for sellers working alone when their buyer is seeking 100 percent financing and wants closing costs funded from the transaction,” says Hackel. “We see that all the time, but they don’t.”
For these already-connected sellers, Penrose offers a pricing structure that’s lower than the one he typically negotiates. He also offers to work without a long-term listing agreement. “They can fire me at any time if they’re not happy,” he says. This easy exit strategy provides a comfort level for uncertain owners, he says.
Whatever their motivation for going it alone, unrepresented sellers who choose to make the switch and work with a real estate professional can win in the end with a quicker, easier transaction and a likely increase in what they realize from the sale. Your task is to find the most persuasive approach to help them to recognize your value.
4 Ways to Find FSBOs
Before you can convert them, you have to find them.
1. Look for a sign — or two. About 40 percent of FSBO sellers rely on a sign as their principal marketing tool. Drive different routes through your market area to look for FSBO signs.
2. Subscribe to a service. Services such as FSBO Hotsheet (www.fsbohotsheet.com), which combs through newspaper and magazine FSBO ads, generate daily lists of leads.
3. Generate your own lead lists. Read open house and For Sale listings in newspaper classifieds.
4. Check out FSBO Web sites. Owners.com and similar sites can help you pinpoint prospective new clients. Legal hint: Check FSBOs against the federal do-not-call list before you make a cold call. You can download five area codes for free at https://telemarketing.donotcall.gov.
FSBOs' Main Concerns
Handling paperwork and preparing the home for sale are two of the biggest concerns for FSBOs, whether they know their buyer upfront or not. Among those who don’t know their buyer, generating interest is a top concern.
Didn’t know their buyer
Knew their buyer
Selling in time desired
Finding time to manage details
Helping buyer find financing
Data from the NAR Profile of Home Buyers and Sellers, 2006 edition, NAR Research
Why Go FSBO?
Saving on the commission remains the No. 1 reason sellers elect to go it alone, but that reason is declining, while knowing the buyer upfront is a growing reason.
Sell to friend, relative, neighbor
Buyers contacted seller
Avoid dealing with agent
Seller has real estate license
Agent unable to sell home
Couldn’t find agent
Data from the NAR Profile of Home Buyers and Sellers, 2004, 2005, and 2006 editions, NAR Research
Will They Go FSBO Again?
Recent FSBOs who knew their buyer were more likely than those who didn’t to say they’ll turn to an agent the next time they sell.
Didn’t know their buyer
Knew their buyer
Yes, will go FSBO again
No, will use agent next time
Data from the NAR Profile of Home Buyers and Sellers, 2006 edition, NAR Research
FSBOs Earn Less on Home Sale
Unrepresented sellers have a median household income that’s only about 11 percent lower than that of sellers who use an agent from the get-go, but FSBOs’ homes sell for 25 percent less.
Household income (median)
Selling price (median)
First FSBO, then agent-assisted
FSBO/don’t know buyers
Data from the NAR Profile of Home Buyers and Sellers, 2006 edition, NAR Research
Happy Convert: From FSBO to Client
In the then-hot Phoenix real estate market, home sellers Ron and Sherry Creer saw little need for professional representation when they decided to sell their home. They expected a steady stream of buyers from the several other houses for sale in their neighborhood, so why pay a commission? “Rather than pay an agent, we thought we’d use the money we’d save to fix up our new house,” says Sherry.
The Creers had just bought a 100-year-old house in Grand Junction, Colo., and were giving it a top-to-bottom redo. But after weeks went by with little traffic, they were grateful when Jason L. Penrose stopped by to chat and offered help with no strings attached.
Penrose, CRS®, GRI, an associate broker with Melcher Agency Real Estate in Phoenix, went with the classic approach to converting FSBOs: He cultivated the Creers’ trust by providing useful information and then was ready to help when they realized they couldn’t do it alone.
“I never felt he was pushing us. He was very honest and open, and he gave us information we could use,” says Sherry. “After we talked to him a few times, we decided to list with him.”
In the end, the Creers consider the commission they paid Penrose money well spent. Not only did he find a buyer, but “he got us out of a big jam,” says Sherry. “There was a last-minute snag with the financing, and the whole deal was about to collapse. But Jason was able to clear it up really quickly so we could sell the house.”
Unconverted FSBO: The Market Was Too Good
Before Benjamin Kende put his home on the market during the sizzling hot seller’s market in suburban Chicago, he listened to a listing presentation from a friend who was a real estate practitioner. But, among other factors, the lure of saving the commission money was too strong, and he opted to sell his house on his own.
“If the market wasn’t as good or if I wasn’t as proud of my home as I was, I might have gone with an agent,” Kende says. The fact that the couple was in no hurry to sell also made going FSBO more inviting.
To generate buyers, Kende and his wife sent a letter to their wide network of friends and neighbors, advertised in the newspapers, and hosted an open house. Within a week, the Kendes had four offers. The eventual buyer was a neighbor who had been to many get-togethers at their house over the years.
“We had a lot of parties,” says Kende. “People knew what our house looked like.”
Despite his success at going it alone, Kende says he has no illusions about the unique nature of the seller’s market at the time. That’s why he might rely on a professional next time. Should he seek representation in the future, one marketing tactic he’ll want his agent to try is a letter-writing campaign similar to the one he and his wife used. “It’s the one thing we did that we don’t find many agents doing, and it helped generate buyers,” he says.
Finding Expired Leads isn’t enough. Calling on them once isn’t enough. Sending them one mailing isn’t enough. If you want to be a successful Real Estate Agent with gaining expired listings’ sales, you need visibility, communication, and continuity. Once you’ve found your Expired and FSBO Leads, what are you doing about it? If you’re not taking action, you could be abandoning a lot of sales. If you’re not taking the right actions, you could be losing a lot of sales.
Use Top Producer to effectively maintain contact with your Expired Leads:
Create an action plan for systematized follow up.
Let Top Producer hold you accountable and hold yourself accountable to the tasks that you create for yourself.
Make reminders of calls that need to be made.
By creating reminders for yourself, you won’t let any leads fall through the cracks.
Print letters and send out emails through Top Producer.
You can use a variety of methods of contact through Top Producer, making it easier to track your follow-up methods and their success.
Make it a habit!
Daily follow up for the first two weeks.
Once you receive an Expired Listing Lead, maintain daily contact with them for 2 weeks. This can be done through a variety of emails, phone calls, mailings, send out cards, etc. By using a variety of forms of contact you can approach them in the way they like to receive communications. Some people like emails, some respond better to personally talking to you on the phone.
Contact them 2 times a month after the first 2 weeks.
Many Expired Listings do not relist right away for a variety of reasons. Let them know that they are still on your radar, and that you haven’t forgotten about them. A lot of sellers will remember you after consistent contact and once all of the other agents pursuing them have faded away.
Make your last to-do on the lead’s plan to assign another plan.
Just because an Expired Lead doesn’t respond to your first attempts at contact doesn’t mean that they won’t be interested in the future. Mostly, if you vary your forms of contact or action plans, they will take note of your interest and dedication that you will likely put into selling their house.
Real Estate, Business and Life Coach Cheri Alguire has partnered with hundreds of Real Estate Professionals and Small Business Owners to help them become more successful in business and in life. Coach Cheri specializes in Group Coaching for Small Business Owners, Working Mothers, Real Estate Agents and Managers. Learn more at www.NextLevelServices.net.
Lead generation is the most important aspect of a profitable real estate business. No matter what kind of a market cycle you are in, getting good listings is vital. Since lead generation can cost a great deal of your time and efforts, it is important that the group of potential clients you go after is responsive to your offer. Expired Listings are a great source of listing leads.
Listed below are some smart tips of generating leads for your real estate business through farming Expired Listings:
We all know that Real Estate is all about numbers. The more listings you have, the more sales are probable. Think of methods for finding Expired Listings that are outside of the box. RedX offers and easy way to find Expired Listings, letting you concentrate on sales, not searches.
Follow Up: Use Top Producer to set up a method of follow up that will keep you on track and prevent the listings lead from slipping away.
Show them how you can sell and why you stand out:
Brochures: Use both online brochures and paper brochures that showcase you and your services.
Testimonials: Always request a testimonial from the clients you’ve worked with. After closing a deal, send a gift basket and enclose a note with a self-addressed, stamped envelope requesting their testimonial and how much you would appreciate it, or you can also follow up with an email link to your own customized online survey that you can create on websites such as SurveyMonkey.com.
Statistics: Have the numbers ready with specific percentages of homes you sell compared with the area’s average. Show them market statistics and sales statistics in their neighborhood and price range.
Video: Use video in your website that really showcases their home and sets your website apart from other real estate agents’ websites.
Staying ahead of the trends in marketing and listing approaches will ensure that your Real Estate business is setting the standard. Following these tips for finding, approaching, and selling to Expired Listings will take your business to the next level.
Real Estate, Business and Life Coach Cheri Alguire has partnered with hundreds of Real Estate Professionals and Small Business Owners to help them become more successful in business and in life. Coach Cheri specializes in Group Coaching for Small Business Owners, Working Mothers, Real Estate Agents and Managers. Learn more at www.NextLevelServices.net and www.RealEstateMoms.com.
Expired Real Estate Leads • 14 Monarch Bay Plaza #486 • Monarch Beach, CA 92629 • (949) 334-REDX (334-7339)