Are "Expired & Canceled" Listings part of your criteria for selecting a real estate company? Should it be?
What are expired listinsg or canceled listings?
- Expired Listings - are those listings that did not sell over the duration of their listing contract. The contract "expired" before a sale was reported.
- Canceled Listsings - are those listings whose contracts were canceled before a sale has occurred or the contract term expired.
If a seller cancels the listing why should you even care about this data? Cancelations occur for many reasons. The fact of the matter is it represents a home that was once for sale and no longer is. At one point they wanted to sell but for some reason were unsuccessful and have chosen to remove their home from the market premature to the contract expiring. ("If I don't get a $1,000,000 for my house I'm not selling", perhaps after trying at that price point and proven unsuccessful they cancel). That is one example.
Has this measure of not selling increased then with the change in the market place? Short answer is Yes.
Over the past few years we can see that prior to our boom the market would have roughly 50 listings per month expiring. Sometime a little more sometimes a little less. Then we entered our boom time when "everything" was selling. Even in that time period we experienced homes that did not sell. In fact, 284 homes did not sell during 2006. During that year investors, builders, home owners and speculators saw the busy real estate market and we reacted by buying homes or building homes and taking advantage of the rising market. The number of homes that did not sell in 2007 was more the three times greater than in 2006.
Why the sudden rise? Supply exceeded demand essentially, in other words probably a lot of people showed up late to the party.
Over the last few years we have also seen an increase in REALTORS® and an increase in real estate companies. More choice for sellers in the end.
When selecting your real estate company and associate take a moment and talk about success rates or expired listings rate. I believe this information is important. All companies are going to have some listings that expire or get cancelled, that's normal.
Much like baseball, the player with the higher batting average
average is sought after come contract signing versus the player with a low batting average because the higher the average increase the teams chances for scoring runs and winning the game.
Do you want to hire the agent and company that takes more listings that don't sell (More strike outs in baseball terms) or one that has a stronger track record for getting the job done (the higher batting average)?
A good decision is an informed decision. Ask what percentage of listings sold or what percentage of homes listed did not sell?
Your Friend in Real Estate,