Should I bother with listings that have been on MLS for a while?

Question

Hi,

I am a newbie looking to househack my first property and my only way to browse the properties are from MLS, Redfin, etc

So the question is - the listing has been on the MLS for few months - Should I even bother looking at those properties? Obviously there is a reason they aren't selling (most likely due to the price not making sense or perhaps the inspection did not come out great)

Should I make an offer based on the number that makes sense and see if they will come down? or keep on searching for the best/good deal to come around as these are probably not a good deal in the first place?

I am in Northern New Jersey area looking to house hack 2-4 MFH.

Thank you!

Jeff Petsche · Answer

@Jonathan Park As a real estate professional of over 14 years, and I have a saying with my buyer's: "Communicate So We Can Negotiate" Meaning: If you don't make an offer, you will never get into negotiations with the seller. I preach this to my buyer clients all the time and it gets them off the fence of over thinking their decision.

Figure out the price that works for YOU, contact the listing agent, communicate your situation to them like @Bob Razler mentioned, verbally give them your price and if the agent thinks it's worth offering then have the listing agent write it up (unless you are using another agent to represent you). Too many people forget that it's OKAY to verbally get into conversations before you actually write up the paperwork. It never hurts to start that dialogue.

Also, look at other terms/conditions that might sweeten the deal, even if the price is well below asking. There are other ways to strengthen an offer beyond price.

Key: Try and determine the need of the seller, the motivation and work off of that if you can solve their problem.

I just submitted an offer for my buyer on an REO listing that I thought we would never have a chance of getting, but to my surprise the agent called today and said the bank accepted our offer and it was $40K below the comps. So, you never know if you don't ask.

Also, you're investing, so take the emotional element out of the deal. You want to be respectful and professional in your negotiations, but you're not here to make friends either. It's business and I WILL NOT do a deal that doesn't make sense just because I'm worried that I might "insult" the agent or the seller.

Good luck and go get em.

Bob Razler · Answer

Hello @Jonathan Park !

I agree with @Lauren C. .  Every home has a price for you that is defined by your objectives.

I always reach out to the listing agent to make sure we get introduced and to cultivate the relationship (they may have other opportunities).  I let them know I am an investor and that cash flow is my critical metric (yours may be different).  I let them know that I could make a highest-and-best offer but that it is considerably below the list price.  I tell them that I don't want to waste their time or insult their client but that I would be happy to send over a written offer if the agent feels it is OK.  If not, I don't; if so, then I send it.

It never hurts to offer, the worst they can do is say no.  Or another way of saying it - if you don't ask, they can't say yes.

On a related note, from my days in home building and buying farms, never underestimate the value getting them a written offer.  It goes a long way to getting them to YES.  If you call and just ask, they might hang up and move on.  If they have a contract with an offer in hand, that speaks to them every day about the money they could have in hand if they say yes.

Good Luck!

Bob

Chris LumLee · Answer

On one hand, you could use that to your advantage. Perhaps the seller may become more motivated to sell and you can get a better deal. Like @Lauren C. said, others may have had a different strategy. This is the point your research comes into play...are the numbers good? Is the location good? Etc. And then you can go from there. Cheers!

Lauren C. · Answer

Hi @Jonathan Park

Some may argue that if the property is still on the MLS, that means other investors already passed it up precisely for the reasons you already stated (price, condition, etc.) but those who passed it up might have had a different strategy. Perhaps it doesn't work as a flip or as an investor owned buy and hold, but being a house hacker puts you in a different position.

I also think every property has a number. As long as you're not lowballing to the point of being offensive or wasting the time of your realtor (like 50% below ask), then I don't see why you wouldn't make an offer. If it's been on the market that long, I'm sure the seller would be more flexible.

But I'll let the more experienced investors chime in. Good luck!

Joe Villeneuve · Answer

I look for these.  They are to my advantage...especially if you have seen a number of pendings that didn't go through.  Make "your" offer.  Not the one that you think the seller wants, but the one you want.  If it doesn't work, it doesn't work.  Wait for it.  The fact it is still on the market could very well mean the house from hell...or, it could mean a bull headed seller, and it's all just a matter of timing.

Andrew Johnson · Answer

@Jonathan Park Personal perspective:  make the offer.  The bottom line is that you never know a sellers motivation.  If the property has been on the market for literally months then the agent has (no doubt) had some uncomfortable conversations with the seller.  Now is the seller intransigent about price?  Maybe.  If so, there's not much you can do.  But at some point the seller could just be tired of having the property.  Or they could be renting it out as a cash-flowing income property and unless they can get $___K they would rather keep it.  The bottom line is that I could hypothesize all day long.  Odds are any agent that you work with can talk to their agent and figure out some of the backstory.  I doubt the sellers agent wants to waste time if there are "surprises" that will be found during the inspection period.  So this all gets back to making the offer than makes sense to you.  Maybe a little less as there will likely be a counter coming your way.  Odds are it won't be accepted, there is something "off", but at least it crosses it off your list of potential properties.

Should I bother with listings that have been on MLS for a while?

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