OFF MARKET DEALS???

[Jorge Ruiz]

Hello BP!

I have a newbie question. My question today deals with OFF MARKET deals? What exactly does that mean? Here are my views:

1. A property being offered for sale before it is even posted on the MLS.

2. A property that was listed in the MLS where the contract with the listing agent has been cancelled in some way, but the property still shows in the MLS.

Is this correct?

Thanks BP!

[Mike Sedlacek]

I've been an investor for over 30 years. Most properties I've found worthy of purchasing was from my own hunting. Now that I have moved to a new state and city, I went for my real estate license for two reasons, to make it easier to find properties to purchase, second if the property I found isn't a good fit for investing in then list it and get something for my time invested both hunting down the property and spending time with the home owner. 

I have discovered several reasons a house doesn't sell thru a real estate agent. If it is a newly listed property, never before offered for sale the home owner is usually shocked at the price the agent investigated and offered to list for to get a quick sale. The home owner thinks otherwise and wants more money. After about two weeks on the market with no showings or offers the listing agents tries to get the home owner to reduce the price. But there is a problem. One has to know the market, such as are there more homes for sale at present time then buyers? Or is inventory down and good properties hard to find? And are buyers reluctant to jump into a house as a second choice but would rather wait for the right house to show up on the MLS?

Another problem a home owner faces is where are they moving to and how soon does he need to move. If the mortgage balance on his home is high with little equity then the price will reflect the asking price because the home owner has to add the commission and closing costs and some for negotiation.  The other alternative if the owner is in a time problem is to go for a short sale by reducing the mortgage balance with permission from the bank or face foreclosure to get out from under the property. 

With location into consideration such as not so desirable area or not so good schools causes a home to take longer to sell and this has to be discussed with the owner as to why it will take time to sell. Therefore an agent will ask for a 6 month listing.

Now when a listing expires, in my area there are over 3000 licensed realtors and about 1 % of them call on expired listing to get business. Problem is that house is now shop worn and not so desirable by buyers any longer. They are looking for a substantial reduction on price. But again the home owner may not be able to do so. They go the For Sale By Owner route for awhile before listing again with a realtor. Around and around we go.

My suggestion when you find out about an expired listing go directly to the house, knock on the door, introduce yourself as an investor, that you may be interested in purchasing the house. But you need to be there right after the listing expires. But there is a little trick, if you find a house you are interested in listed with a realtor, go to an open house by the realtor, especially a house that has been on the market for 90 days. Zillow posts open houses. Ask questions. Determine the motivation. Then keep an eye on the property but don't nag the owner. Get ready with all your ducks in a row, with a contract to purchase and a quick close offered. You will get the house for about a 20% reduction if the owner can afford to.