The news is out. Real estate is back. Home buyers are in the game again, but they’re facing a huge inventory shortage in most markets. Some buyers make three of 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 Look for ‘expired’ and ‘withdrawn’ listings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.
Think outside the box
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.
- How to Buy or Sell a Home That’s Off the Market
- 3 Tips for Avoiding House-Hunt Heartbreak
- Ways to Get Creative in a Real Estate Transaction
Brendon DeSimone is a Realtor & HGTV real estate expert. He has collaborated on multiple real estate books and his expert advice is regularly sought out by print, online and television media outlets like FOX News, CNBC and Forbes. An avid investor, Brendon owns real estate around the US and abroad and is licensed to sell in two states. You can find Brendon online or follow him on Facebook or Twitter.
Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.
Mortgage rates eased this week, as expectations for rapid economic growth were tempered by continued worries about the impacts of the European debt crisis and the potential impact of government spending cuts.
Rates on 30-year fixed-rate mortgages averaged 3.54 percent for the week ending March 21, down from 3.63 percent last week and 4.08 percent a year ago, Freddie Mac said in releasing the results of its latest Primary Mortgage Market Survey. Rates on 30-year fixed-rate loans hit a low in Freddie Mac records dating to 1971 of 3.31 percent during the week ending Nov. 21, 2012.
For 15-year fixed-rate mortgages, rates averaged 2.72 percent, down from 2.79 percent last week and 3.30 percent a year ago. Rates on 15-year fixed-rate loans hit a low in Freddie Mac records dating to 1991 of 2.63 percent during the week ending Nov. 21, 2012.
For five-year Treasury-indexed hybrid-rate mortgage (ARM) loans, rates averaged 2.61 percent, the same as last week and down from 2.96 percent last year. The average rate for the week ending today ties an all-time low in Freddie Mac records dating to 2005 last seen during the week ending Feb. 28.
Rates on one-year Treasury-indexed ARM loans averaged 2.63 percent, virtually unchanged from last week, but down from 2.84 percent a year ago. Rates on one-year ARM loans hit a low in records dating to 1984 of 2.52 percent during the week ending Dec. 20, 2012.
Q: I am an apartment owner in a major metropolitan area and have a question regarding heaters. I currently have leases with all 10 tenants in my building where I pay gas and they pay electricity. All the units have gas wall heaters. I recently conducted my annual inspection of the units and realized that the large majority of the tenants left their heaters on during the day (most likely because they are not paying the bill), which obviously runs my bill up. Can I switch the gas heaters out with new electric heaters (in which the tenants would pay for their heat because they pay for their electricity)?
A: This is an excellent question. You have hit on an important topic that many landlords and property managers often overlook. Any time you can make the tenant responsible for the costs of operating your rental property, you give them an incentive to conserve.
This was true back in the 1970s when many residential rental properties were converted to individual electric meters, just as it is true with the recent trend towards individually submetering water. With your situation, you could possibly convert from a master-metered natural gas meter to individual gas meters and then have the tenants become responsible for their own natural gas usage.
This would be the best way, as it would cover not only the gas for space heating but also the gas used for cooking and heating the water, particularly if you have individual hot water heaters for each unit.
What does it take to have a successful buyer showing? There’s much you can do to set the stage, not only when you are the listing agent, but when you are the buyer’s agent as well.
Whenever possible meet the buyers at the office, especially on first time appointments. This reinforces your professionalism. Furthermore, if something makes you uncomfortable about being alone with the buyers, it’s easier to cancel the appointment when other people are present.
When your buyers arrive, greet them warmly and give them the itinerary for the day. Since most buyers expect you to drive, plan on taking your car unless you are a poor driver. Your car must be immaculate. Store your broker paraphernalia in the trunk. If you’re uncomfortable driving, let the buyers know ahead of time so they won’t be surprised.
Google has unveiled “Keep,” a note-taking app that allows users to jot down notes on the fly, transcribe voice memos and snap photos. All content created with the app uploads to a user’s Google Drive, and syncs with other devices, including Android 4.0 and up.
A Google-produced video explains how to use Keep.
The app displays content in a tile format that allows users to drag and color different pieces of content into preferred arrangements. And it represents a direct challenge to Evernote, another note-taking app that offers a broader array of features than Keep.
In the future, people who use Google’s cloud-based data-storage app, Google Drive, will be able to create and edit Keep content from inside Google Drive, which may lead more people to adopt it, TechCrunch noted.
Real estate has changed dramatically during the past decade. The stream of property information now available online — largely through companies such as Trulia and Zillow — has eliminated agents’ monopoly on access to information and, in doing so, transferred power to every consumer with an Internet connection.
Buyers and sellers now control the real estate process, a massive shift that has forced brands and agents to react. Those reactions, however, are too often misdirected toward quantity (leads bought in bulk, higher conversion rates, more Facebook or LinkedIn connections) as opposed to quality, a costly mistake for real estate professionals.
As companies such as Amazon, Starbucks and Zappos have shown us, great experiences are the best way to grow business. Agents must heed those lessons and connect personally with their customers, not through “spray and pray” marketing tactics that treat clients as just another number.
Real estate is a fairly segmented industry, and business models don’t change very much over the years. Brokerage companies buy and sell properties for prospective homeowners, investors buy properties for investments, property managers manage properties, and mortgage bankers finance properties.
Occasionally, someone wanders into the real estate business from somewhere outside of this universe and creates a totally a new model — either because he or she is brash, or not smart enough to realize this new invention is too good or too bad to be sustainable.
Such is the case with Erik Coffin, CEO of Gotham Capital Management, who is doing so many different things with his relatively new Beverly Hills-based company that I’m not even sure he can keep track of it all.
I asked him, “What’s the main thing Gotham Capital does?” He answered, without irony, “We don’t know. We make money.”