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Updated over 11 years ago, 08/17/2013
MLS Competition
Thought I would share an anecdote of a situation I just went through that coincides with everyone's sentiment that REO properties listed on the MLS are super competitive right now.
A home covered in mold was listed about a week ago. However, it was priced very realistically in a good area so I figured there would be a lot of investor interest. My realtor found out from the listing agent that prior to my bid, there had already been 14 others submitted. Knowing this, I ended up offering asking price as my numbers still worked at this price. So that offer was rejected, but the agent then mentioned that I was free to submit any higher offers. So I put in another bid about $2k over asking. The listing agent came back to me from this offer, saying that the bank is only considering the top three bids and my updated offer wasn't even "close to being in that neighborhood." Blunt way of putting things, but serves as a good example of how competitive the markets are.
Just listened to Danny Johnson's podcast yesterday, and that really reaffirmed for me the need to create my own marketing to get rid of all this competition. There are a few more MLS properties on my radar, so I might get lucky with one of them, but simply going off the MLS is not a sustainable business model. I need to get focused again on yellow letters and driving for dollars.
BPers, feel free to share other MLS stories like this - I'd be interested in hearing them!
Well, to each their own, but you *can* certainly make a living off the MLS, but its not exactly easy. I've been primarily an MLS whore for most of my career, I have MLS access in 7 markets right now (which is overload, and I really only work in 2-3) and do just fine. You have to PLAY the game differently than every one else. You cant just place offers on new properties anymore, you have to catch the fallout, and create relationships with agents. You have to get listing agents to double end the deal in order to incentivize them to push your offer.
That said, it CAN be done, but I am working on direct marketing currently as well. I'd rather have leads coming my way nearly automatically than hunting and pecking and playing my MLS games.
- Anson Young
- Podcast Guest on Show #235
Anson Young, you're right, I think I jumped the gun with that comment. I just thought it was an interesting siutation for me given all the talk on BP about intense competition on MLS properties.
Going to continue searching throught MLS but also want to generate leads on my own - I think every rehabber would like to be in that situation.
Kyle B. - absolutely. I'm talking to another investor on BP today about him flipping 40 a year, all deals coming from MLS. In a HOT market (I have MLS access, and watch everything FLY off in 24 hours or less....)... If I glean any new tips, I'll share them here.
- Anson Young
- Podcast Guest on Show #235
Sounds very similar to what is going on around here in Grand Rapids, MI.
You gotta be fast, but not only that, you'll more then likely need to go above the asking price for the MLS houses.
Everyone and their neighbor seems to be reinterested in real estate again!
Now that real estate is 'cool again' , maybe it's a good time to get into the guru business? Although that market is probably saturated too!
It is possible to find deals on the MLS, but yes the competition is tough. I know a gentleman in my market that does quite well off the MLS. Having said that, the competition, at least in my market, is very strong with certain direct mail lists. I try and concentrate on a few things and learn to do them well, and it seems to be working so far.
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Yes, there are way too many fishermen with their lines in the water in the MLS area of the lake. I totally agree with you Kyle B. that it's better to fish in an area where there aren't so many boats.
Pardon the silly fishing analogy....
This applies equally to people all sending direct mail to the same old lists. Get creative. Be innovative. What can you do that other people are not all doing??? =)
Couple stories along the lines of what you asked, recent property came on the market, 47,000, I was there early the fiirst day, listing agent said bank wont look at offers for seven days, i waited until day six to see what the competition was before offering, offered 54,200, it sold for 60,000!
Good Friday, house came on in the morning , estate sale, i was listing one that morning and couldnt get there until 2:00, it was a deal. When my realtor called the listing agent, said there were , i believe 13 showings, scheduled in the next 48hours. We got her to put it pending by giving her a full price cash offer, without having to go highest best with multiple offers. 80%% of multiple offer deals lose. We do buy quite a few fallouts, and keep writing every three weeks on ones that have been on the market. These days we get maybe 30% on the front end, the rest are backend.
We are still able to get our deals of the mls, although it is much more challenging, as the competition increases, home prices are increasing as well, thus we are consistantly able to sell for above recent comp prices. We just got a contract on one, first weekend on the the market, 11 showings, sold at list for 199.000, comps seemed to be at 179,000, and was the number my realtor said wouldbe list price when we bought it four month ago.
Another I just closed on, highest anything sold in neighborhood, 1/2 mile, six month, was 149,000. With two car garages, mine was one car, very nice house. Listed at 169,900, sold in 7 days at 168,900 and 3,000 closing costs.
We may need to start marketing at some point but for the time being we are still able to get our deals of the mls.
Hi Kyle, I've been digging through the MLS for a few months now (of course, I have no previous RE experience), and have finally put in two offers in the past couple months. The first was a six year old house with a busted foundation, though the house was supported just right that the "house proper" was still in generally great shape, minus some minor aesthetics, though no major stress fractures in the living portion. It had been dropping since January, starting at 134K, down to 79K when we ran across it in June or so, then 69K in July. We'd begun due diligence (rather than wrapping it up under contract; a mistake, viewed retrospectively) at 79K, put the offer in three days after it hit 69K, and were behind two other same day offers, after six months of no interest. ALL I can figure is it popped up on the filter radar when it hit 69K, and there she went.
So, I guess that was somewhat afield of the point, but basically everything that catches my eye in my range is pending by the time I see it; there are literally two properties available in some of the major metro areas here in Virginia that fit my criteria, and my margin preferences are fairly small. I work full time as well, which really helps us out on the funds and credit side, but severely inhibits my ability to constantly scan the MLS, network, do walkthroughs, and the like.
That said, I believe that in addition to continuing to look over the MLS, I'm going to start trying some direct mailing as well; I think I'm too keyed in, and need to start experimenting and stop being so cheap on my marketing. Thanks for the posts, they are always much appreciated.
The MLS REOs are crazy in this area. The ones that hit the market as good deals routinely get bid up 20k-30k over list price. There was one listed at 70k with a 220k ARV that got sold for $135k. The guy that bought it does good numbers in the area but I will be shocked if he pulls more than a 10k profit on this one.
I hear you, Kyle. I mostly stay away from MLS and just really use it to run comps. It's doing good for others but I know I have to be creative on my own. Create over compete.
I use Mls. And continue to get deals but as others said you have to move quick sometimes in hours and know your numbers so u can get the offer out quickly. Deals are out there just not many on front end remember to look for properties that have been on market for at least 3 weeks.
Originally posted by Dev Horn:
Pardon the silly fishing analogy.... This applies equally to people all sending direct mail to the same old lists. Get creative. Be innovative. What can you do that other people are not all doing??? =)
Get creative. Hang on let me try here, branding. I know a bunch of investors personally that use a direct mail service here and they all use the SAME templates and just change their picture. Holy cow, you won't believe how many more calls I get because I use my own unique cards with a brand. And sellers can actually REMEMBER who it is thats mailing them every 2 months
Here I just shared one to help everyone out, lets see what ideas others have :)
I have mostly bought MLS-listed properties (30 something total). The problem that I'm running into in my area is that the market is improving, but not hot like other areas. When I list a finished rehab, it doesn't fly off the shelf or go for more than the comps. So, I can't spend more when I buy. Also, we're not having the crazy competition on the REOs, but the problem is that the asset managers must be thinking that my area is like the rest of the country. I'm putting in offers at 70%ARV - repairs and I can't get them accepted. They just reject my offer and let the darn thing sit on the market.
Originally posted by Bryan L.:
Yah that never made any sense to me. Offer gets rejected and it sits there. I bet banks LOVE having non performing assets on their books, in fact assets that COST them money.