Why listings die
Most expired listings aren't bad houses. They're houses built for one exit: a retail buyer with a 30-year loan at today's rates.
When the numbers don't work for that buyer, the listing sits. Price drops don't fix it, because the problem isn't the price. It's the exit.
Change the buyer and you change the outcome. Every save below keeps you on the deal and gets your commission paid at closing, same as a normal sale.
Diagnose it in 3 numbers
Before you pick a strategy, get these. They tell you which save fits.
The loan is the asset
Seller has no equity to sell... but they have a low-rate loan a buyer would love to step into.
Listed at $315K for 90 days. No offers. Seller owes $290K at 3.25% and is relocating for work.
| Sale price | $315,000 |
| Commission (6%) | −$18,900 |
| Closing costs (~2%) | −$6,300 |
| Loan payoff | −$290,000 |
| Seller walks away with | −$200 |
Even at full price, the seller brings money to closing. That's why it's not selling.
The save
A buyer purchases the home "subject to" the existing mortgage. Title transfers, the loan stays in the seller's name, and the buyer makes the payments from here on. That 3.25% rate is worth real money today, so the buyer can pay a fair price and still make the deal work.
Seller wins
- Walks away with relief instead of bringing a check to closing
- Payments stay current, which protects their credit
- Can often get some cash at closing too
You get paid
- Your commission gets written into the purchase contract
- It's paid at closing from the buyer's funds
- You close a listing that was about to expire
Watch out for
- Due-on-sale clause. The lender has the right to call the loan when title transfers. It's rare when payments are current, but it's a real risk. Disclose it to the seller in writing.
- Use a third-party loan servicer so the seller can see every payment get made
- Insurance has to be set up correctly for the new owner and the existing lender
- Close with an attorney or title company that does these regularly. The seller should have their own counsel.
Retail price, investor muscle
The house needs work. Retail buyers won't pay for it as-is, and the cash offers insult the seller.
Listed as-is at $280K. It needs about $40K of work and would sell for $360K updated. Cash buyers are offering $220K. The seller won't take it.
| Retail sale after updates | $355,000 |
| Commission (6%) | −$21,300 |
| Closing costs (~2%) | −$7,100 |
| Renovation (fronted by the investor) | −$40,000 |
| Seller's guaranteed net (paid first) | −$255,000 |
| Investor's spread | $31,600 |
Seller nets $255K instead of $220K. The investor earns their spread for the risk and the work. You sell it at retail.
The save
An investor signs a novation agreement with the seller. It's a purchase agreement plus the authority to improve and market the property. The investor pays for the updates and the home goes back on the market, ideally with you still listing it. When a retail buyer closes, the seller gets the net they were guaranteed and the investor's spread comes out of the proceeds.
Seller wins
- A higher net than any cash offer on the table
- No out-of-pocket for repairs
- A guaranteed number in writing
You get paid
- You keep the listing
- Full commission on a higher, retail sale price
- A stale listing turns into a fresh one with new photos
Watch out for
- The seller has to understand the structure and the guaranteed net. Put everything in writing and have an attorney draft it.
- Set clear timelines, and spell out what happens if it doesn't sell by then
- Comp conservatively. Appraisal risk and days on market are where novations get hurt.
- Some title companies won't close these. Line up one that will before you pitch it.
Sell the terms, not the price
The seller owns it free and clear and wants full price. Buyers want the house but can't make the payment work at today's rates.
A retiree lists a paid-off home at $400K. Showings are good, but offers keep falling apart on financing. The seller doesn't need a lump sum... they need income.
| Price | $400,000 |
| Buyer down payment (10%) | $40,000 |
| Seller carries the note | $360,000 |
| Buyer payment at 6%, 30-yr amortization (P&I) | $2,158/mo |
| Same loan from a bank at 7% | $2,395/mo |
| Interest to the seller over 5 years | ~$104,500 |
With a 5-year balloon, the buyer refinances or sells and pays off the remaining ~$335K. The seller gets full price plus interest income.
The save
The seller acts as the bank. The buyer puts money down, signs a note and mortgage in the seller's favor, and makes monthly payments to the seller at an agreed rate, usually with a balloon in 3 to 7 years. The price holds because the buyer is paying for the terms.
Seller wins
- Full price, or close to it
- Monthly income plus interest
- Possible tax advantages from spreading out the gain. Have the seller talk to their CPA.
You get paid
- Commission paid at closing out of the down payment
- Size the down payment so it covers your commission and the closing costs
- The listing sells at the number you listed it at
Watch out for
- If the buyer will live in the home, federal lending rules (Dodd-Frank / SAFE Act) come into play. Use a licensed loan originator (RMLO) to structure the loan.
- An attorney drafts the note and mortgage. Title insurance on every deal.
- Use a loan servicer to collect the payments and keep the records
- Vet the buyer: income, reserves and a realistic plan to pay off the balloon
Before you pitch any of these
Creative doesn't mean casual. This is what keeps you, your seller and your license protected.
- Get your broker's approval on the structure before you bring it to the seller
- Give the seller everything in writing: how it works, the risks, and what they walk away with
- Recommend the seller has their own attorney review it
- Close with an attorney or title company that does creative deals every week
- Disclose any interest you or your partner has in the deal, up front
- Don't overpromise. If the numbers don't work, say so. That's how agents keep sellers for life.
Don't let it expire.
DM me the address, the seller's situation and what's owed. I'll tell you which save fits and structure it live with you. That's how most of these start.