If your real estate listing has expired, you might be concerned. However, it is expected, and you can still sell your house. Expired listings are standard; you only need to determine your next steps. It can happen for various reasons, and often, it leaves homeowners feeling frustrated if their home doesn’t sell. On the other hand, expired listings offer a great opportunity for lead generation to real estate investors and agents. Let’s look at the types of expired listings and how you can sell your house to potential buyers.
Can You Sell An Expired Listing?
Yes, you can still sell your home even if your listing agreement with your real estate agent has expired. The expiration simply means that your previous listing agent no longer has an active agreement to market and sell your home. You should first understand the different types of listing agreements and why listings may expire. However, you might still get a phone call after your MLS listing has expired.
Types of Listing Agreements
Before we delve into the types of listing agreements, let’s look at what a listing agreement is. A listing agreement is a contract between a homeowner and a real estate broker to find a buyer for the property. Understanding the type of listing agreement you had is crucial in determining your next steps. Here’s a list of the common types of listings.
#1. Open Listing
Think of an open listing like a “for sale by owner” where you, the homeowner, can work with several realtors at once. You agree to pay a commission the first time a realtor brings you a buyer with an offer you like. But, if you find a buyer on your own, you don’t owe anyone a commission. This kind of listing turns into a race to find a buyer, and realtors might not be too keen on it. They might not want to spend time and money on your listing, especially if you can get a buyer’s contact information and beat them to it.
#2. Exclusive Agency Listing
In this deal, you sign with one real estate agent to sell your home. If that agent, or any other agent they work with, finds a buyer, you pay them a commission. Like with an open listing, you don’t owe a commission if you find a buyer yourself. This type of listing can be challenging for agents because they don’t have total control over the sale, and many might want to avoid taking this kind of listing.
#3. Exclusive Right to Sell Listing
This is the most common type of listing. Here, your listing agent calls the shots. No matter who finds the buyer—whether you, your agent, or another agent working with them—you pay your agent a commission. If another agent helps out, they usually split the commission. A 90 or 120-day exclusive right to sell is standard and gives the agent enough time to market your home effectively. If the listing expires and your agent isn’t doing a great job, you’re not stuck with them. But if they’re doing well, you can always renew the listing or try a more extended listing with an option to cancel it after 90 or 120 days.
#4. Multiple Listing
The Multiple Listing Service (MLS) is a key tool for agents. It’s a system where agents share information about homes for sale with each other. If you’re working with an agent, they’ll put your home on the MLS, where other agents can see it and bring potential buyers. Most MLS listings also end up on Zillow or realtor.com, so buyers can look at them. Homes sold by owners (FSBOs) miss out on this exposure, which can be a big downside since agents using the MLS have many homes to show their clients, but FSBOs only have theirs. For Cream City Home Buyers, this can be an option.
#5. Net Listing
Net listings can be tricky and are even illegal in some places. In this setup, you tell your agent how much money you want to get from selling your home. The agent then adds their commission on top when they list the house. If they sell it for way more than your desired price, you might feel ripped off, thinking the agent didn’t tell you the real value of your home. And if they get an offer close to your price, they might not make much commission and could be less inclined to show you the offer. Instead of a net listing, a better option might be an exclusive right-to-sell listing where the price includes what you want to net plus the agent’s commission.
How Long is the Average Listing Agreement?
Most listing agreements last between 90 and 180 days or 3 and 6 months. Real estate agents will assess market conditions to determine an optimal listing period for your home. Hot real estate markets may opt for shorter listing agreements of 3 months so homes do not sit unsold for too long. Slower markets may use 6-month listing agreements to allow buyers more time.
The length of listing agreements can vary, but they do eventually expire. However, an expired listing is different from a withdrawn listing. In a withdrawn listing, the listing might not be available on the platform, but the agreement between the broker and the homeowner is still present. On the other hand, an expired listing has not been sold at the end of the contracted agreement period. A listing can be withdrawn for several reasons, but that doesn’t allow the homeowner to be approached by other agents.
Why Do Real Estate Listings Expire?
There are several common reasons why real estate listings expire without the home selling:
- Pricing Issues: If your home was overpriced compared to its market value, you likely received little buyer interest. Failure to adjust pricing is a top reason listings expire.
- Marketing Problems: Your agent may not have properly marketed your listing through appropriate channels to generate buyer leads. Insufficient marketing exposure can lead listings to expire.
- Market Changes: Evolving market conditions like rising interest rates could dampen buyer demand. Fewer active buyers in the market can cause listings to expire.
- Agent Performance: Your previous agent may not have put in sufficient effort through showings, open houses, and lead follow-ups. Lackluster agent effort often links to expired listings.
- Personal Situations: Changed circumstances like job relocations or divorce could have motivated you to let the listing lapse. Your real estate needs may have shifted.
While these are common reasons for expired listings, it does not mean you cannot sell. If you don’t want your listings to expire, you can always look for the expiration date and figure out a plan before it expires. You need to avoid a stagnant listing, as that can be costly to you as a homeowner.
What to do If Your Listing Agreement Expires?
You still have several options to sell your home if your listing expires. Here are some of them.
Relist With Your Current Agent
Relisting your home with the same real estate agent is the easiest route. Discuss why it did not initially sell and make any necessary pricing adjustments or marketing improvements. Previous listing agents often agree to relist homes at no additional charge.
Hire a New Real Estate Agent
You can sign a fresh listing agreement with a new real estate agent. A new agent brings a different perspective and new marketing strategies. Comparison shop agents to find one you connect well with and who actively markets homes in your neighborhood. You can also look for referrals from your friends and family. If you know any real estate business professionals, asking them won’t hurt.
Sell Privately (FSBO)
If you are comfortable selling independently without agent representation, you can become a for-sale-by-owner (FSBO). This route requires the most effort but allows you to avoid realtor commissions. Make sure you properly market and show your home to generate interest.
Work With Real Estate Investors
Real estate investors buy homes directly from motivated sellers with expired listings to flip or rent out. This provides a quick and straightforward way to sell, but typically below full market value. Still, investors save you the work of selling yourself.
These are not the only options, you can also consider selling a house in probate.
Can You Sell Privately After a Listing Expires?
Yes, you can sell your house independently after your listing agreement expires. The prior listing contract you signed with an agent was only valid for a defined period – once it lapses, you can choose to sell solo without owing a commission. This is one perk of expired listings.
That said, selling real estate without guidance is complicated and time-consuming. Marketing, showings, negotiating, paperwork, and closings require significant effort. While you can list it on social media and other listing platforms, it will take some time for you to learn the ropes. Working with experienced real estate professionals even after a previous listing expires is often your best bet for success.
An expired listing isn’t a dead end but an opportunity to reassess and re-strategize. Whether you relist with a new agent, adjust your marketing strategy, tap into social media, or go the FSBO route, there are multiple paths to a successful sale. Remember, in the real estate business, persistence and adaptability are key. If you want to sell your house in Shorewood, feel free to contact us. Our team is ready to help you with your house, and we buy houses in New Berlin and surrounding areas. Contact us today to turn your expired listing into a successful sale.