By Brendon DeSimone
The news is out. Real estate is back.Homebuyers are in the game again, but they're facing a huge inventory shortage in most markets. Some buyers make three or four offers on homes, only to keep losing out to other buyers. In this tight market, buyers and real estate agents need to think outside the box. You may need to go after homes that aren't listed for sale. Here are five ways to do that.
1. Look for 'expired' and 'withdrawn' listings. A good agent will scour the MLS for homes that were listed in the recent past but never sold. Many homes failed to sell because they were seen as overpriced at the time. Does their last list price seem like a valid price today? Chances are, the owner doesn't realize how much the market has picked up and might still be open to selling the home. Have your agent contact the owner with a letter expressing your interest in purchasing the property. Show the owner you're serious, and you'll likely get a response.
2. Search for 'make me move' prices. Do you feel like cattle being herded through a busy open house with dozens of other buyers? Scouring the Zillow app while on the Sunday open house circuit? You might want to filter listings by searching for homes with a Make Me Move price in the neighborhoods where you want to own.
Owners who have set a Make Me Move price have gone out of their way to indicate a price that would make them sell. Some would-be sellers are unrealistic in their pricing. But others may have listed their property months or years ago, and their price may in fact be doable. Reach out to them with an offer. It often works.
3. Check rental listings. Why would a buyer go after rental listings? Here's why: The owner may have lived in the home at some point but had to move for a job transfer, divorce or life change. At that time, their home could have been underwater or the market simply wouldn't support the asking price. Instead of listing it with an agent, they just decided to rent it and "ride it out" for a couple of years. Their current tenant might have given notice and, without knowledge of the changing market, the owner simply wants to rent it again. Go see the home. If you like it, find out if the owner would be open to selling. Make it easy, and they may be on board.
4. Don't ignore overpriced listings. The No. 1 complaint among real estate agents everywhere is working with a seller who's unrealistic about their home's price, especially in this tight market. But as a buyer, you might use it to your advantage. After six weeks or less in some markets, an overpriced home loses its luster. The seller doesn't clean as often. Weeds grow in front. And it just may not show as well. The fading curb appeal, along with an unrealistic price, will keep buyers away.
How is this good for the buyer? Many sellers won't list their home at a lower price but will sell it at a lower price. Go in with an offer before the first price reduction, if possible. Once they do drop the price, other buyers will take notice again, and you may have competition.
5. Off-market or pocket listings. Some homeowners want to sell but don't want to or can't list. Maybe they simply don't want the hassle of keeping a clean home and dealing with showings. Or perhaps they're just very private. Especially in the luxury market, some owners just don't want to publicly list their homes.
In many markets, real estate agents regularly network with each other about potential deals. Some areas have dedicated websites for agents to share off-market properties, also known as "pocket" listings. Also, brokerage firms generally release upcoming listings to their agents a few weeks before they hit the MLS. Work with a well-connected agent and make sure you're privy to these potential opportunities.
Most active buyers spend months looking for a home the traditional way. Until prices rise enough to bring more sellers and inventory into the market, these buyers will likely keep facing tight housing inventory. That's why it's important to make sure your agent is trying every way possible to uncover opportunities for you. Be open to using non-traditional methods to beat the competition and take advantage of low interest rates and favorable pricing.