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Expired Listings

When a Real Estate Broker takes a sales contract (a listing) on a property and is
unable to sell it in the time allotted, the listing expires on a stated date, and the expiration
of the listing appears in the local Multiple Listing Service (MLS) bulletin and is at that
point up for grabs for anyone intrepid enough to contact the owner of the property.
Typically these expired listings are published daily or at least once or twice per week, and
for the eyes of the MLS Member-agent only.

The information normally available in record is:

  • The property address,
  • Square feet,
  • Date taken off the market,
  • Most recent asking price,
  • A description of the accoutrements,
  • Year built
  • Lot size.
  • (In some areas) the name and address of the former listing agent

One of the favorite means of trolling for new listings for many of the more
aggressive Realtors is “Working the “Expired’s.” In order to get the next chance a the
listing, the Realtor need merely contact and convince the seller that his/her talents and
wherewithal in the business are greater than were the Realtor’s who just dropped the ball
on marketing the property that last time around. Most Realtors (not all) will agree to do
more advertising, more open houses, more pitches at the local Realtor Board meetings,
etc. But more often that not they take the same listing, put it right back in the same MLS and wait for someone else to bring them a buyer because a buyer’s agent just happened to
run across the listing when the buyer came into the office asking for properties in that
general area and price range.

Many property owners who have learned this lesson too late, and who have had to
sit and watch a burdensome and cash-draining property go unsold for six months or more
are exasperated and disillusioned with their Realtor, and with the real estate sales industry
in general. And this makes them a little testy, but considerably more open to creative
options that they may not have considered before (e.g., lease optioning, equity sharing,
rent-to-own, wraps, seller carries, contracts for deed, etc.). It goes without saying that
these people thus become wonderful prospects for a creative real estate entrepreneur who
would offer to step up and take the property off their hands, while saving them a real
estate commission in the process.

The idea here is to get access list of Expired’s in your community, or in the
community in which you wish to concentrate, and generate regular mailings to the
disillusioned owners, suggesting that you understand their plight and that you would like
to speak with them about their property…now that it’s showing on the MLS as an
“Unsold” Property (this term will create more ‘Pain’ in the mind of the seller than will
the expression ‘expired listing’).

If your not a Realtor and have no access to the MLS, one way to obtain this
closely guarded information is to find a new Realtor who may be having trouble coming
up with the money for the Board dues and their MLS membership, and offer to pay one
or the other, or both, for the agent in exchange for their access to the centralized data. In most localities it will entail being given a phone number and PIN code with which to
access the board’s website on the Internet.

A Different Approach

Network member, Adam Albright in Arizona, has come up with another twist on
working Expired listings without having to do all the footwork, and the ability to elicit
the services of a Realtor for all the hard stuff. Adam has taken it upon himself to begin
contacting Realtors in the more distant areas in lieu of the homeowner, after their listings
have expired. His fax to the Realtor essentially let’s them know that that if they can
resurrect their relationship with the seller and help him make the deal, he will buy the
property under his own take-it or leave=it terms and conditions, and see that the agent
gets paid for their services: i.e., a commissions they’ve already kissed good-bye.
Obviously this approach garners great interest from Realtors who see their hardearned listings and commissions going down the drain, because of not having been able
to perform under the terms of the agreement with their client. This also affords the
Realtor an opportunity, and reason, to re-contact their lost client with a real live
prospective buyer in hand and perhaps even get a renewal on the listing.

The following is a sample cover letter and a sample offer that can be mailed or
faxed to the Realtor. The cover letter is designed to neutralize objections before they
arise, and the offer explains the terms and the conditions and financing process under
which he is willing to proceed. If the letter is not answered, nothing is lost, and he may
contact the owner directly: if it is, then that’s another property owned. Adam’s has sent out 150 such faxes to date and his return call rate so far is 50%.

We’ll see how many deals ultimately come from the program and report to you in a
future newsletter.


Ms. Brooke Angler
Century 21 Four Rivers
9876 Fly Street
Steelhead Bluff, Montana

Dear Ms. Angler,

The Rod County MLS records indicate an expiration of your Real Estate Sales
Contract with Mr. and Mrs. James Alpers on the property at 123 Lake St. in Troutsville
has expired. However, I would none-the-less like to make an offer on that property and
will, for the sake of expediency and your professional assistance, be pleased to make the
offer through your office, rather than by my contacting Mr. and Mrs. Alpers directly (if
you wish).

Before reviewing the accompanying proposal, however, in anticipation of
concerns you may have, or which may arise from your broker, your company’s attorney
or the sellers themselves, please make special note of the following important points.

  • There are two ways to transfer real estate ownership – by a transfer of legal and
    equitable title to a buyer, or 2) by a transfer of beneficiary interest in a trust to a
    co-beneficiary, wherein the trustee is vested with the legal and equitable title • Although not widely known of or extensively used by the vast majority of real
    estate professionals, land trusts (Illinois type title-holding trusts) are in-fact
    extremely safe, viable, protective and wholly legal holding and transfer vehicles.
    These trust forms are authorized or accepted in every state throughout the U.S.,
    and have been used for real property ownership transfer since the beginning of the
    twentieth century. There are no states in which this particulars trust structure is
    not held wholly viable, valid and legal.
  • Unlike other inter vivos trusts, the beneficiaries of a land trust are its directors and
    make all decisions evening view of the fact that the trust property’s ownership is
    vested with the trustee. The land trust trustee holds full legal and equitable title
    ownership of the property along with the full Power of Sale as directed by the
    trust’s beneficiaries. Also, note that the nature of such a title-holding vehicle is to
    convert Realty ownership to that of Personalty, even through the IRS will still
    treat all beneficiaries as owners of the Realty for income tax purposes (IRR 92-
    105/The Doctrine of Equitable Conversion (See Black’s Law, 6thED, pp
  • Through the use of a bona fide title-holding land trust, ownership interest in real
    estate can be effectively conveyed to a co-beneficiary without the necessity of a
    new mortgage loan, without an unauthorized title transfer, and without a violation
    of a mortgage lender’s “due on sale clause” or alienation admonitions. (FDIRA
  • By utilizing a simple land trust as a transfer device, one can effectively buttress
    his/her real estate ownership against virtually any threat of lawsuits, judgment creditor claims, IRS tax liens, bankruptcy and legal claims in marital dissolution,
    Probate proceedings, etc. (From an asset protection standpoint, one’s holding any
    real estate in one’s own name is considered by many to be an invitation to lawsuit
    and potential financial devastation).
  • The land trust transfer allows one to convey full income tax benefits to a tenant
    co-beneficiary (See IRC 63(h)4(D), along with virtually all of the Bundle of
    Rights in Fee-Simple Real Property Ownership.

Please bear all of the above closely in mind as you peruse the accompanying purchase


Date: 4/2/2002
From: Investor Bob
To: Ms. Angler, Realtor® – Century 21, Four Rivers

As I indicated in my cover letter (attached), I am prepared to acquire the subject
unsold property under the following terms:

  • Property to be accepted in As-Is condition without request for repairs, alteration
    or improvements by seller now or in the future. Buyer shall hold seller free and
    harmless from any claim of financial loss relative to discovery of substandard or
    hazardous conditions presently known and disclosed, or later discovered.. • All loans, taxes and insurance relative to the subject property to be current at the
    time of transfer
  • Property to free of all title clouds and liens, other than those of record, at time of
  • Seller to hold the current mortgage financing in place for a minimum of three to
    four years…although the ideal term would be ten years or more (the seller’s
    [Note here that the suggested transfer process, more fully described in the
    accompany cover letter, will not violate a lender’s due on sale clause or constitute
    any transfer to me of the property’s legal or equitable title.]
  • Seller to be paid all of its existing equity (if any) in the property at such time as
    the property is re-sold or refinance at the termination of the proposed Agreement.
  • During the course of the proposed transaction, the property shall be held in trust,
    in the name of seller, for the benefit of seller, until such time as the Agreement
    has terminated and the property is disposed of or refinanced by buyer.
  • Buyer to lease the property from the seller’s trust on a “triple-net lease” basis: i.e.,
    paying for 100% of all costs of ownership, including mortgage payments,
    property taxes and insurance; as well as handling 100% of all management,
    maintenance, repair and day-to-day upkeep for the term of the agreement.
  • Buyer to take possession the property at the close of Escrow (30-60) days
  • During the term of the subject title-holding trust, buyer shall be named as a cobeneficiary, in order to enable all the benefits of real property ownership to accrue
    to buyer/co-beneficiary without the necessity of title transfer and without undue risk of comprising the due on sale clause relative to the underlying mortgage
  • Upon disposition of the property the termination, all existing loans will be retired
    by buyer/co-beneficiary, and at that time seller will receive 100% of all of its
    equity existing at the inception of the transaction.
  • Seller shall be allowed to refinance its mortgage loan or acquire secondary
    financing at the monthly expense of buyer, prior to, or at any point during, the
    course of the subject agreement: so long as the agreed-upon aggregate monthly
    payments agreed to be made by buyer/co-beneficiary are not increased in the
    process; and so long as such new financing or re-financing would not exceed the
    mutually agreed upon value of the property at the inception of the proposed
  • Buyer to cover all costs of closing except for Real Estate commissions, back taxes
    or unpaid insurance or delinquent mortgage payments (suggest commission
    deferment or carry for 1,2 or 3 years if a burden for seller)
  • This offer shall become valid and in full effect 30 days from the date shown
    below, during which interim period, the following issues will be confirmed by
    seller for the benefit of buyer:

    1. loan condition and pay-off;
    2. comparative market value,
    3. condition of insurance and property tax payments,
    4. freedom from zoning and building code ordinance violations,
    5. freedom from utility company liens, income tax liens and mechanics liens
  • Buyer to execute any Purchase Offer and Contract deemed by agent to be suitable
    for the subject transfer, so long as all terms and conditions proposed here remain
    fully in tact.

Signed: __________________________ Date ______________________

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