Why Do Listings Expire?

An "expired" listing occurs when a listing contract runs out (expires) before a property goes "under contract" (“sells”).  Some may attribute this to being in a “buyers’ market”, meaning that there are too many houses to sell (supply exceeds demand).  That makes sense if your house sells.  Otherwise, how do you tilt the playing field in your favor?  With that in mind, there are generally two causes:  the obvious one is over-pricing; the other is poor marketing.  Absent addressing either of these, patience is required.

Over-pricing a listing creates several potential problems.  The primary one is that it can literally prevent the most likely buyers from ever finding it in their searches.  The price may be "positioning" the property with competition that offers more for the same money and may be properly priced for their features and overall condition.  Pricing is meant to tie together the "big three":  location, features and condition of a home.  There has to be symmetry.  You may get showings but a lack of interest will indicate that other similarly priced houses offer more OR that, while your house has similar features to others viewed, the condition is perceived as being less than the competition.  In a buyer's market over-pricing will hurt your chances of selling.  The good news is that this can be fixed:  even though a likely buyer may have decided to buy something else, an effective price reduction will get noticed by agents and buyers and generate interest and showings.

Poor marketing is inexcusable.  The primary way that Realtors market Real Estate is through the multiple listing service (MLS) specifically and through the Internet in general (either through "syndication" or direct upload).  The MLS printout is like a resume:  if it is incorrect, prospective buyers may NOT be able to find a house that they might actually want to see.  Searching for Real Estate is like doing a Google search:  garbage in, garbage out.  The result of poor marketing is that the property is kept on the market longer than necessary causing the "days on the market" to rise and the "perceived value" to decline.  Many sellers reduce their asking price when it may have been completely unnecessary.  I show my clients how I am marketing their homes and commit to NEVER asking for a price reduction unless I can look them in the eye and assure them that the asking price is THE problem.  My job is to "promote and protect their interests" and keeping their money (proceeds) in their pocket goes a long way!  Many sellers never question the marketing and find out too late that it was ineffective.

When a listing contract expires the seller is given a fresh chance to restart the marketing process or, at least, to review their options.  Some sellers will stay with the same agent (doing the same thing over again and expecting different results does work sometimes) or, in frustration, keep their house off the market waiting for a better time to sell.  The shame of it is that the problem may be as simple as tweaking the marketing!

I recommend that sellers know when their listing contract will end (many lose sight of this date), stay involved in the details (many have never seen their MLS printout or searched for their own property online) and fully evaluate their situation to make an informed decision the next time around.  Many listings “expire” once.  When it happens more than once it could raise a "red flag" that may actually keep potential buyers away.