So I was told to look for listings that are 90+ day's old, because the sellers should be motivated by that point. I've found some that are close to 150 day's on MLS.
My question: Are these actual potential deals? My thinking is if it's been that long sitting, what's wrong with it? Will I be able to sell it if I bought it?
It just seems that if it doesn't sell now, then it won't sell later?
I'd say that in this current market the vast majority of the listings that hang on that long are simply overpriced. Sellers in those cases have unreasonable expectations/opinions about the value of their property and have found an agent who was willing to cater to their delusions. You might possibly find someone who is ready to admit they've been overpriced and come down to market price, but as an overall strategy (if you are looking for flips/resale properties) it doesn't make sense right now.
usually there is a reason they sit longer than the average. Find out why. Maybe it is overpriced and the owner will not budge. Know what it is worth to you and make offers. Either they will accept your offer, which means you get a good deal, or you will find out why it has been onbthe market so long. Just remember every home will sell fast at the right price. If i offered to sell you my home for 1$, you would not wait. How much you ask is directly related to how long it sits.
Having lived in a super hot market in the past, (DC in 2004) like Denver is now I have to agree with @Jean Bolger . When my house was on the market for 17 days I thought it was past time to lower the price. Fortunately that was when I got an above asking price offer.
However, this can be a great strategy in much slower markets.
@Shay Kent so my first comment is, if it was easy the monkeys would be doing it. Buying old listings is like mining any lead source, it's a numbers game. Lots of low offers and hopefully you will get one that sticks. Old listing are just a smaller target that can have greater motivation than the market as a whole.
As a whole, it will be a very frustrating experience. Many offers, lots of mad agents and owners. Some agents might actually like you because you will help them to convince the owner they are over priced.
IMO a better source would be expired listings. If you can get to the owners, some are often mad at agents in general and are mad because they were lied to about what the property is worth. Them sometimes will sell to someone who offers cash and a quick close.
Keep in mind it's a numbers game. The saying in the business is look at 100 offer on 10 and buy 1. I think in your case it would be offer on 1,000 and evaluated 100 and buy 1.
Think of it this way, if it was very fertile soil, people wouldn't be telling you about it, they would be doing it. People don't do it because it's extremely hard work with low potential.
Bottom line is there are deals everywhere. You just have to find that source that fits with what you enjoy and work it and then systemize it and hire others to work it.
All great comments but I would like to add a different approach that gets missed over and over again (even I did this years ago)
Before shooting low-ball offers through MLS listings, build rapport with the listing agent, because at the end of the day, it is the listing agent that can "sell" your offer.
This is why those Robo-offer softwares never work. Remember guys, this is a relationship business. Sure, we run numbers all day long, but remember if you can get that listing agent in your corner, they may just convince the seller that while your offer may not be the highest..it is the best.
There are a few agents here that send robo offers. One buyer in particular that I know has sent several on my fix up listings. The other agent doesn't call, email or attempt communication. He only sends the offer over. He must be doing some business since I have seen the same name for a few years.
It was funny on my last listing, my client instructed me to ignore him, which I did. The other agent still didn't bother to call, and he just resent the same poor offer.
@Mark Archer is spot on. This is a relationship business. If that other agent had called me or communicated, it would have went a long way.
Thanks everyone! I just got into my head too much thinking, "well if they can't sell it, what makes me think I can?" As long as the #'s make sense then we're all good. I suppose looking at MLS properties I need to go through a buying agent?
I used to exclusively go after old listings. But I agree with Justin in that 99.97% of the time a listing has not sold is because it is overpriced. Either the agent "bought the listing" by promising some ridicules price, or a stubborn owner who put a couple grand in upgrades and expects to get double that back plus labor.
Bottom line, if the house was burned to the ground, infested, with 2 liens, but was worth $800,000 and would only take half of that to make all the problems go away... and the asking price was $1000..... it would be sold by nightfall.
You can blame the economy, market, neighborhood... doesn't matter. Lower any price on any property to the right price and it will sell. No need to do any more digging. With these properties it is all numbers. I used to make offers on all of them unseen at 50% or more less than asking. I didn't do any research until I got a call back or a signed offer.
Now I am not suggesting anyone do this. Just saying it works. Whenever I got a price ridiculously low, it almost never matters what the actual property looks like or where it is. So there is no answer to your question of "what's wrong with it? Why isn't it selling". Lower the price and we have a deal.
Most are over priced.
Some aren't motivated.
Some need more rehab than an HGTV fan can do.
Others just need the wake up call that your offer will provide.