Ever Wonder Why Nearly 40 Percent of All Real Estate Listings Expire?
In sales, closing is a big word. In real Estate it is everything and yet in spite of all of the hype in 2019 the statistics for expired listings are still nearly 40%. That number has remained relatively unchanged over the past 5 years. I know because I have been watching and writing about it for a long time.
We have Laptops, Desktops, Tablets and Smartphones. Everyone is connected and there is more technology today in real estate than there has ever been and yet that is the collateral damage for houses that just dont sell conventionally in Stockton, Sacramento and Modesto.
With all of the banter by the National Association of Realtors, the hundreds of millions of dollars spent on advertising touting the advantages of hiring a real estate agent, can someone please explain to me why nearly 40% of all real estate listings expire? That number represents a vast graveyard of houses once on the market that never sold.
What is an Expired Listing?
Simply stated an expired Listing is a home of a seller that did not sell within the contractual time frame as outlined by the Real Estate Listing Agreement. The average length of a real estate listing agreement is 6 months or 180 days.
While no one can guarantee that they can sell your house, this number represents a huge black eye for real estate agents everywhere when you think about the magnitude of that failure. Real Estate Agents are sales people and with a 40% expired listings record, it indicates that the vast majority of them are not very good at their job.
Let it soak in… Almost 40% of all Listings in Stockton, Sacramento, Manteca and Modesto Expire! That is a huge number and it means that 40 out every 100 homes listed with a real estate agent are eventually left to linger in an expired listing graveyard. It means that for all of the chest pounding by real estate agents a lot of homeowners are left to fend for themselves. I can’t imagine that anyone wanting to sell their house hears about this statistic in advance of signing a 6 month listing agreement.
Worse yet, real estate agents are resolute that they operate by a code of ethics, and that the integrity of the industry operates accordingly, and yet I have never heard anyone in the profession utter a word about this this horrible closing ratio. Wouldn’t you think that this would be a noteworthy disclosure to all would be sellers in advance?
This omission, may explain why 78% of all sellers wanting to sell their houses actually list with the first real estate agent that they talk to. Maybe it’s the hype of the presentation or the glitter of the seemingly million dollar logos, but in my analysis, it means there is a lot of risk in selling a house.
If real estate agents were to disclose their batting average, so to speak, most home sellers would at least pause and ask a lot more questions before signing a 6 month listing agreement? Maybe they would also look for actual cash home buyers in Lodi, Stockton, Sacramento and Modesto that would be willing to pay cash for their house rather than allow the Multiple Listing Roulette Wheel to determine their fate.
In preparing for this post I did a lot of research and it surprised me that the number of expired listings as a statistic is now relatively easy to find. The numbers are there and there was a lot of information on the definition of an expired listing and how to relist an expired listing. Of course my results are looking at the industry as a whole among all real estate agents. The top 10% of all agents fare much better at what I would call a “closing ratio”. The problem is is that most sellers are not seeking out the best agents and those statistics are stated below. When I first ran the numbers 5 years ago I pulled the data directly from the MLS and cross referenced with Sold listings and the net result was 38% expired. Every top real estate agent and real estate investor can tell you what the problem is and in my research I also found the details were outlined more often than not by another real estate agent.
What Are the Reasons for an Expired Listing?
- Pricing of the House
- Inexperienced Agent
- Weak Agent
- Condition of the house
- Targeting the wrong buyer
- Difficult to Show
- Inconvenient to show
My name is Peter Westbrook and I am a Real Estate Investor in Sacramento, Stockton, Modesto and Manteca California. I am the owner of Westbrook REI and we are a Local Cash Home Buyer… a “We Buy Houses Stockton Company”. We have helped hundreds of families by providing real solutions to buying houses throughout Northern California and we pay cash. We also have never had an expired listing and the reason is simple. I dont want to sell your house or earn a commission, I want to buy it and let you get on with your life.
If you want to avoid becoming one of the 40% of home sellers wondering why your house didn’t sell, call me at (209)481-7780 and let’s talk about selling your house to me. We don’t need bank approval, we won’t order inspections, appraisals or make unreasonable demands, we just buy your house fast and pay you cash.