Method to search for properties underpriced for the area

11 Replies

I am wondering what methods people have found most efficient and effective for searching for listed properties in an area that are priced lower than the surrounding homes.

I bought a car recently and there was this great website that would aggregate the cars listed on a bunch of sites and every deal would get a ranking from overpriced to 'great deal' just based on comparisons with similar vehicles.

I'm trying to find some way to do a similar search with listed properties. Usually I will look at a certain area, establish kind of a range of values for that area, then start looking for prices on the low end. The problem is that this is tedious. Widening the search area does not help because the price range of the adjoining neighborhoods might be lower or higher.

What I would love to be able to do would be to search an entire metro area and only receive results that are priced in the bottom 10% for the zip code, or that are priced 25% less than other homes on the street, etc. Some might be $1m homes in a $2m neighborhood, others might be $30k homes in a $50k neighborhood, but the search function would recognize the lower relative price. I think that would be a really helpful function.

Does anyone know if something like this exists? I have local mls and have also used realtor.com, zillow, trulia, etc.

Hi @Cooper B.

Cars are easier to do, because their price is same (+/- few $100-$1,000) based on their make, model, year, etc across different regions. However, houses are different, a 3 bed/2 bath house in Chicago will not be worth the same as a 3 bed/2 bath in Los Angeles.

Real Estate is so local that even if there was such a website that listed underpriced properties, I am not sure how reliable it will be.

Zillow does something similar to what you are looking for, but those numbers are all over the place.

I have noticed in my area generally a foreclosure (HUD, Fannie, Freddie, etc.) is listed below market.

Unless you were looking to buy 100s of properties, you should be able to focus on an area and study it really well and find the deals that meet your criteria.

Medium logoSharad M., REsimpli | [email protected] | 619‑786‑3482 | http://reSimpli.com | Podcast Guest on Show #155

The best way is to know the numbers in your market and how the adjustments affect the price (number of rooms, year built, size of the house...etc)

That way when you come across a property you will know what is underpriced and you can jump on it. Most of the time good deals go fast (especially with our current market's low inventory) so act fast

My MLS will allow my to display results that include a column for "$/ft^2" (dollars per sq ft). I can then do a sort operation and rearrange the whole list in order by the dollars per sq ft. Your MLS software may not do this, but dig around in there a bit and see if it will.

having a real estate license is very important. When I do a search I check off, Available-Bank Owned-Estates. In my county that I look in there are typically over 160 properties as such always listed. I arrange them by dates and get to know each property. Even in my market one house lets say a 3-2 that is 1400sf can vary in price from 90-150,000 depending on location. So you have to know each community. I also look for price drops.

A house could be on the market for two months and get no action, the price is then dropped by $10,000 and now you have five offers.

But my point is I do this search every day. Most of the properties I bought were sold within one week of being listed. You have to be in the game and aware of what is coming on the market all the time. You snooze you loose . You really can't expect a hired realtor to do this for you unless you have a very special relationship with them. So that it cost be a couple hundred buck a year to be a realtor and have access to MLS is a bargain. I can also analyze the price almost instantly with the CRS tool. (Courthouse retrieval system) so if a home is significantly underpriced I know it and can act fast.

Acting fast is key because he who hesitates is lost!

@Cooper B.

Kind of a trick questions combining listed properties and under valued. I did a study of hundreds of properties that I personally bought and only 25% were listed properties. Meaning 75% weren't listed. When you're dealing with unlisted properties there may be little or no competition. I'm not saying to ignore listed properties, just that there are more places to look for properties.

Sometimes there are smoking deals that are listed, sometimes on purpose sometimes not. Recently looked at a property that had 12 offers the first day, I was not the high bidder, somebody offered 50% more than asking. The asking price was a smoking deal; asking + 50% not so much. If the price is a super bargain, it will attract buyers like bees to honey. Rarely do we get one of those, sometimes, but rarely.

Most of the good deals that have been listed are where the sale price was significantly lower than the asking price. Vacants, out of town owners, long days on market, needing work, are some of the key factors in acquiring properties for less than asking whether they are listed or not.

@Bryan L. That's a great idea, thanks for the tip!

I realize all those points about great deals going quickly, importance of finding unlisted deals, etc.

I'm just trying to more efficiently weed out the cheapest homes in each neighborhood. Even if they are fairly priced, these would be the homes that need some work, have not been updates, etc.

@Cooper B. - What MLS software are you using?

@Martin Zawarski

Totally agree a license is highly beneficial. That's why I got licensed the realtor I was using was never passing good properties to me.

Could you expand on this comment: "I check off, Available-Bank Owned-Estates." It's not an option on the Chicago area MLS to distinguish between bank owned in the search criteria . Is it an option on your boards MLS?


@Bryan L.

Our MLS uses List It.

As of May 1 all of our listings will have to include square footage, but currently most listings do not have that info. Hopefully after that requirement becomes active there will be a way to search using $/SF. Currently we do not have that feature.

Originally posted by @John Weidner :
@Martin Zawarski

Could you expand on this comment: "I check off, Available-Bank Owned-Estates." It's not an option on the Chicago area MLS to distinguish between bank owned in the search criteria . Is it an option on your boards MLS?


In our MLS , we could specify different variables. We could look up various status- available, sold, pending , under agreement, withdrawn, expired. Plus a whole host of other information. There is a subset of special conditions such as estate or bank owned. You can get very specific with your search. It is a great tool

Originally posted by @Bryan L.:

My MLS will allow my to display results that include a column for "$/ft^2" (dollars per sq ft). I can then do a sort operation and rearrange the whole list in order by the dollars per sq ft. Your MLS software may not do this, but dig around in there a bit and see if it will.

 Hi Bryan,

What software is your MLS using? I think our local association is making a switch and there are a couple of options on the table, I am hoping one of them has the feature you mentioned.

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