How to decide between mailing absentee owners or expired listings?

Question

Which is the best option: absentee owners or expired listings? My thinking is that absentee owners is especially good for the pricey suburbs. But in lower-income rental markets, for example Newark City, I suspect it's better to do expired listings.

Any thoughts?

I've heard of people having good success with Absentee Owners in lower-income rental markets, but I don't see how - I would think these owners are getting pounded with mail over the years.

p.s. For absentee I have my own list making machine - I had a friend develop a program to sort through all the tax records for any area and produce a neat table with property and absentee owner contact info.

Michael Quarles · Answer

Logically the two best lists are

FSBOers
Expired

The other reality is these lists have four things in common.

1) they want to sell
2) they're mined extensively by real estate agents
3) they're typically over priced or they would sell
4) they're not large enough lists to sustain a business model alone.

The other reality is that linkage and marketing are extremely valuable. If it wasn't we wouldn't have shopping malls and auto malls. Even fast food and service stations on opposite corners.

The logic of absentee out of area is that when there's motivation several factors come into play.

1) mitigation of travel costs with reduced prices
2) understanding the concepts of sub2 and creative financing
3) the reality that the unit may no longer be a tax benefit
4) they're typically not emotionally attached to the deal

You should never pull a list solely based on absentee.

1) length of ownership should be 7 years.  
2) property should have a minimum of 40% equity
3) 3-5 bedrooms
4) SFR

At times you'll want to limit year built and value.

Prospecting is all about highest and best use of marketing dollars. Does an expired seem as if they have more motivation.  Certainly.  Are they the first choice?  Absolutely not.

Now if you want the best of both.  Pull your list of absentees and cross check the expireds who fall on it.  Those are the low hanging fruit.

Mark Yuschak · Answer

Why not do both?

We market to both types of sellers and actually get a better response from the out of town owners.  Typically the expired listing owners ended up letting the listing expire (or the property did not sell) because the seller was unrealistic with pricing.

Enrique Reyes · Answer

Michael: With absentee, why do I want them to have lived there for 7 years + and have 40% + equity?

How do I find public data on % equity? I know I can find number of years owned on tax records.

Eric C. · Answer

Also, do you think it's totally a waste to market to absentee of urban multifamily houses?

Eric C. · Answer

Thank you all, a lot of great info here.

Michael: With absentee, why do I want them to have lived there for 7 years +  and have 40% + equity?

How do I find public data on % equity? I know I can find number of years owned on tax records.

Jerry Puckett · Answer

Absentee Owners are one of the staples of my marketing plan. Yes they do get pummeled with a lot of mail, so I strive to be different, but I focus on being persistent. I think there are many who get frustrated after the first mailing, but I get the best response around the third or fourth.

And of course, there are other filters that go in to an absentee list as Michael mentions.

Likewise, there are other filters that go in to expired listings as well to get the best response. As Mark Yuschak mentions, many times the listing expires because of unrealistic pricing. So I aim for sellers who are about to expire, who have had at least one significant price drop, and who do not live in the house.

I have noticed over the last year and a half that the number of sellers who do a price drop is shrinking. What you're seeing is an increase of those selling for what they owe...therefore cannot drop the price without paying someone for the privilege of buying their home.

Of course that opens up more possibilities for sub 2 deals....

Eric C. · Answer

Mark, do you do out-of-state or just out-of-town? Are you using commercially available lists?

I also am wondering, do you think it's possible that many people are using the same data when it comes to absentee? If so, that would mean the same recipients are getting pounded with mail over and over again, which is too bad.

At least with expireds, if you have MLS you can select listings that are very recently expired, like with a month ago, which would probably mean less competition.

Bill Gulley · Answer

Out of town owners may not want or need to sell. Expired listings tried to sell and failed, unless their needs change, they probably still want to sell. You'll find expired listings in all price ranges.

Being an out of town owner is not a motivation to sell, unless it's a dump and a liability to the owner. You'd need to boil it down further, like out of town owners due to an estate settlement before I'd get excited about them.

I'd go with the expired listings, usually less issues than dealing with people in who knows where.....

How to decide between mailing absentee owners or expired listings?

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