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5 March 2009

Overpriced and Expired Listings: Third time’s a charm

“I tell you what girls, there are three things you want to be in life… somebody’s  first love, a second wife and a third listing agent!Lynn Madison

I was enlightened with this real estate truth at a recent meeting with a group of our agents in the Chicago area.  There were about 40 of them (3 men, the rest woman) in the room. 80% were veterans of the industry who have seen and endured many markets.

This No BS statement, from a No BS group, was made in response to a lively discussion regarding expired listings. It referenced the dilemma facing agents considering listing a home previously listed by several other agents over an extended period of time. Should they take a listing like this given the challenges of today’s market?

After the shock and laughter of this revelation wore off, it got me thinking. Mmm. What a great opportunity for that third agent.

As I see it, here is how the scenario would play out and why three times might be the charm.

First listing agent: Lists the property above market value because that’s what the seller wants. Spends precious time and money marketing a property that is not going to sell. Good marketing can’t fix a bad product. Sellers get frustrated. Agent gets frustrated. Both move on. Listing expires.

Second Listing Agent: They reduce the listing price down to market value but struggle with the stigma of a property that had been for sale for so long. Low ball offers ensue. The sellers won’t yield. The house sits. Sellers get frustrated. Agent gets frustrated. Both move on. Listing expires.

Third Listing Agent: Sitting pretty. Sellers are now desperate. And yield to professional advice. This agent gets the property and lists it to sell with a price that makes it too good to be true. Or at the very least marketable enough to reduce if not overshadow its sordid listing history. Renewed interest arises as other agents view the new listing price as a sign that the seller is finally serious. Agents start to bring back buyers. They disclose the fact that it has been on the market forever, informing them of the many price reductions, which indicates their openness to receive offers. Offers are made. Sellers settle. House sells.

A sold sign gets planted in the dirt outside the home that is visible to every single neighbor now talking about who the agent is that sold a home that could not be sold.

Here’s the moral of this story. Don’t take overpriced listings and work expireds.

4 thoughts on “Overpriced and Expired Listings: Third time’s a charm

  1. Hi Wendy,

    Great post.

    I have been successfully listing and selling expired listings for some time now and you’re right, by the time you get the listing the sellers are realistic because they’ve faced the fact they need to price the place right to sell it.

    Expired listings can often be better than new listings, because the sellers may be highly motivated if they are still actively looking to sell.

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