Is Mareketing for non-MLS houses necessary?

8 Replies

Hello,

I have been buying my houses off the MLS, auction web sites, and other wholesalers. I wanted to receive some opinions if it is worth investing into marketing campaigns to find motivated sellers that are not listed on the MLS?

The local REI clubs I visit in my local area (st. louis) all seem to recommend some sort of marketing to find off MLS deals (Probates, Absentee owners, etc).

Thanks

We are very motivated sellers

Originally posted by @Jason Genovese :

Hello,

I have been buying my houses off the MLS, auction web sites, and other wholesalers. I wanted to receive some opinions if it is worth investing into marketing campaigns to find motivated sellers that are not listed on the MLS?

The local REI clubs I visit in my local area (st. louis) all seem to recommend some sort of marketing to find off MLS deals (Probates, Absentee owners, etc).

Thanks

Those selling through the MLS are typically motivated but with a catch though -- the property is likely to be priced at or above actual market value. Translation, very thin profit margins -- usually.

Originally posted by Account Closed:
Originally posted by @Jason Genovese:

Those selling through the MLS are typically motivated but with a catch though -- the property is likely to be priced at or above actual market value. Translation, very thin profit margins -- usually.

 Just a comment as a Realtor.  It is against my client's interest to overprice a property - and yes, I've had clients do so against my advice and to their detriment.

The result is that the property just sits on the market, until after a series of downward price adjustments, it finally hits a price that the market is willing to pay.

Properties that have had multiple price decreases over a long period get stigmatized. 

 When they first hit the market, local agents know that they're over priced and don't waste time showing them. 

It's kind of a vicious cycle. I can't put my finger on the source, but I remember that NAR did a study that said something like this; A home that is initially priced correctly will sell at a higher price that an overpriced home that is eventually sold at a reduced price.

Of course, it will sell more quickly, and if you're flipping with hard money, that becomes even more important.

When you purchase off MLS most of the time you are dealing with agents-not the seller. I feel you make better deals and structures if you deal directly with the seller. First of all- you can knock off 6% right off the bat that they will be paying for marketing. Good Luck.

Direct marketing, yellow letters, door knocking etc all find sellers BEFORE they know they are a seller. That's where the best prices are found. Not after they decided to sell and signed with an agent. Just talking about price to the buyer, not value to the seller of going MLS.

Originally posted by @John Santero :

When you purchase off MLS most of the time you are dealing with agents-not the seller. I feel you make better deals and structures if you deal directly with the seller. First of all- you can knock off 6% right off the bat that they will be paying for marketing. Good Luck.

The agent also realizes that the more the seller 'list for' (amount requested), the more they stand to make just based on the % what the property sells for. 

Originally posted by @Charlie MacPherson :
Originally posted by @Greg F.:
Originally posted by @Jason Genovese:

... It is against my client's interest to overprice a property - and yes, I've had clients do so against my advice and to their detriment...

You make it sound like the seller is supposed to feel bad about this. They do it all the time and usually couldn't care less what the realtor thinks. Deals through the MLS are just rare from an investor's perspective.

To get a property at Wholesale, not retail, you need to market off of the MLS with yellow letters, etc.

It improves the profit margin and saves you a lot of money via commission savings that can go into the reno.

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