“If its on the MLS its already a bad deal”

97 Replies

"If its on the MLS its already a bad deal"

Ive heard this a few times already. I dont expect great deals to jump off the page at me but am i really missing out by relying on the MLS to find a good deal?

@NIcholas Hamel If by MLS you mean the real thing (not the .com sites) the answer is no. You are not missing on deals.

The listing price on any property whether residential, commercial or Land is just the “starting price”.  This is designed to trigger a conversation on the property. 

Pricing is a strategic decision not a value decision.  

In most states all property being sold with a Real Estate Agent has to be added to the MLS within a specified period of time ranging from 24 hrs to 5 days depending on your state. You can also get extensions granted for delaying the listing to give time to owner and agents to stage the property, get pictures taken and prepare the listing. Depending on the state you may or may be able to show the property until it is officially listed.

Property sold by owner does not have that limitation as it never makes it to the MLS.

There are deals out there in the MLS, you just need to know where to look and you need to monitor the activity regularly to find those deals when they show up. A good buyers agents can help you set this up with a specific criteria so you automatically informed when those deals come up.

I hope this helps you.

Jose

The MLS is for getting the most money for your seller that you can. It allows you to put it on the market with the most exposure to drive the most interest. It is to get the highest and best for your seller. If you are looking at finding deals for buyers you have to go the other way and find them before they hit the MLS and get the seller to accept your buyers offer (while it's the only game in town).

They likely are expressing that if it's listed on MLS, there is already commission built in of likely 4-7% plus seller is already aware of market prices. That said, many REOs, HUD homes, and those who must or want to sell quickly are listed on MLS. They go very quickly so work with an agent and be prepared to jump quickly.

@NIcholas Hamel just because a deal is off-market doesn't make it a good deal just the same as being on the MLS doesn't make it a bad deal. It is true however that once you meet the right people in the investing world you will start to discover deals that are much better than most found on the MLS.

Off market deals are often properties that won't sell on the MLS, so their owners are motivated. As another Realtor said, people selling their homes on the MLS are trying to get the most they can for their properties. That does not mean there aren't deals there, you just have to dig deeper to find motivated sellers with homes that need our help!

In 2008-2013 I could find good/great investment deals on the MLS. Since 2016, I don't even bother looking because I can't compete with owner occupants. I can compete with OOs and the hedge fund guys on foreclosures and auctions. The MLS will be useful again once a buyer's market returns.

I use Zillow quite often to try and find deals. Now, I have yet to buy my first property so I don't say this with a outstanding amount of experience. However, when I use Zillow I use it more for the information it can help provide on a property (Tracking of listing prices, pictures, days listed, quick facts [beds, baths, acreage, year built], and taxes). I usually find myself looking for properties that have been on the market for quite some time (over 120 days is almost standard) it helps me think that a seller may be more motivated to take a lower offer if I do decided to jump on it.

Zillow also has a section called "Make Me Move" where a homeowner can "list" their price for their house and can let you know if there is someone that doesn't want to use a Real Estate Agent but wants to see what bites they can get. 

@NIcholas Hamel I would say that yes, you are missing out if you're ONLY relying on the MLS to find a good deal. MLS is convenient, accessible and free so anyone with a computer and internet access can compete with you. Also, anyone with local knowledge of the market you're looking at through MLS has already picked through (and likely passed on) many of the properties you're looking at.

This business is about hustle, as much as anything else. If relying on something that literally EVERYONE else can easily do too is your only strategy, then yes, you'll be missing out. 


@Terrell Garren . When do you foresee that time coming back? I am looking at a property now. Its a songle family. Needs to be completely rehabbed. I want to then rent it out. I did the analysis and it looks like the numbers work. But the one thing that scares me is that its been on the market for over 120 days. Makes me think 2 things. Either its more work then most are willing to do orrr its not a good deal. I guess i wouldnt completely know until an inspection?

@Terrell Garren . I walked the property about a half an hour ago. Beautiful area but It needs alotttt of work but the purchase price seems to be about half of what the local market is. So ofcourse im thinking to myself “if a newbie walks up and sees a good deal then why hasnt anyone else” So im wondering if there are any underlying issues below the surface

As a buyer in today's market I'm not a fan of the MLS. You can find deals but it's going to be difficult. Since I don't have a license I have to utilize agents and it slows the process down. Instead I focus on developing relationships to find off market deals.

How valuable is your time? I'm a hands on investor; I swing hammers, remodel bathrooms, and get dirty. For that reason I look for distressed property that doesn't appeal too retail buyers. 

Originally posted by @NIcholas Hamel :

"If its on the MLS its already a bad deal"

Ive heard this a few times already. I dont expect great deals to jump off the page at me but am i really missing out by relying on the MLS to find a good deal?

Yes and no. Off-market FSBO deals could be good, but you need to know where to look. For example, if it is a Turnkey from a TK provider, it should not be on the MLS as it should just be sold by the provider. However, if you are looking for flips, etc. there is nothing wrong with finding it on the MLS. It just means there may be more competition, but that is not always the case!

@NIcholas Hamel

I've found tons of good deals on our MLS. Just got a smoking hot apartment deal for a client.

However, I wouldn't rely only on MLS. I've bought many from wholesalers and direct from seller.

Got to keep a lot of irons in the fire. You never know where a good deal will come from.

@NIcholas Hame

In my area, anything that hits the MLS that is a "deal" is gone that day. And cash offers are king. I've bought two houses since April, both off-market. I have a few investor clients that are constantly looking for deals and coming up with nothing. I got lucky :)

@NIcholas Hamel I'm a broker and I can tell you first hand that there are still deals on MLS, some listings are over priced and tend to sit for a while. Instead of admitting the price is wrong and doing a reduction they let it sit. You'll have to shoot out a lot if offers but there are some in there.

I am a new investor with one single family home rental and am probably looking at doing my next deal in early/late spring. So for a new investor, how/where/who do you develop relationships with for potential off MLS deals?

@NIcholas Hamel

I'm new also and am looking on the MLS. Something I've noticed is that some properties are only available to cash buyers, for example a sfh I'm looking at has knob and tube wiring and from what I understand buyers can't obtain conventional financing.

Someone please correct me if I’m wrong.

I’ve made a cash offer on one and am going through the negotiation process.

You can indeed find some good deals via MLS. But you shouldn't count on just MLS. All of my properties were from the MLS and cash-flow nicely. Well, one I technically found when I saw the sign in the yard a few doors down from my other rental, but yeah, it was listed on the MLS.

I'd love to get a great wholesale deal, but even as a cash-buyer, I have not yet built a relationship with a truly good wholesaler. I mostly just see the junk wholesale "deals".

Lots of very successful investors buy some of their properties off the MLS. It all goes back to the numbers. If they work, they work.

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