Does Number of Days on MLS affect your buying decisions?

Brooklyn, NY · Member since 2017 · 53 posts · 19 votes

Hello All,

I am a new investor and looking in Upstate NY for my first rental. I am currently working with a broker and she said the below statement that really changed the way I view properties under my search criteria.

"If the property has been on the MLS for more than 3 days - it probably wasn't a deal to begin with."

I would like to hear your views on this as well. Do you look at how long a property has been available for sale? Does this sway your decision to buy the property in the first place? I work a full time job and I find it a bit difficult to have enough time to analyze/visit/evaluate properties as soon as they hit MLS. Any other buyers with a full time job that can chime in on their process please?

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Matt Brown

Rental Property Investor · Nolanville, TX · Member since 2008 · 130 posts · 88 votes

@Mo Farraj

Personally, no, that situation wouldn't affect me. I do look for properties that have been on for quite some time (3 months +) as those sellers may be getting desperate and wanting to deal more.

As for it being 3 days or so, could just be not fit for someone's portfolio or they're funds are tied up and they're not able to execute. If the numbers work for you then go for it. Could still be a good deal.

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Charles Kao
Specialist · Grand Rapids, MI · Member since 2016 · 1k+ posts · 611 votes
7y
@Mo Farraj Depends on area and price range but we do not even bother looking at MLS deals unless we are willing to over offer a few thousand. If it hits a week and not sold then we know we have some room to negotiate because in my market if you don't price it right you can easily cost yourself 20,000 because people assume somethings wrong or think twice about not selling. As you get in the 250k and above price range that time frame is more like two weeks to a month and then in the 400k price range 45-60 days is more
common. Pays to have a realtor that knows what is typical market time frames.
1 Reply
Shannon Cohan
Realtor · Tampa Bay Area · Member since 2019 · 24 posts · 12 votes
7y
Depends on what's you're looking to buy. Longer time on MLS usually equals motivated sellers then again it could also just mean the property isn't really worth what they're asking.
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Andrew Turner
Real Estate Agent · Atlanta, GA · Member since 2018 · 82 posts · 53 votes
7y
It is rare that my company will purchase a property listed on the MLS, but we will not pass up a good deal just because it is listed. Concerning a property that has been sitting for quite a while, is really more of a situational issue in my opinion. The property could have the potential to be a great deal, but when an agent lists the property at too high of a price, then of course it is going to sit. Any real estate investor can run their own comps with very little work, and if the house is in such a condition that it needs an investor, then no traditional home buyer would even consider the property, and investors will pass all day. So, in that case, one would just wait for a price reduction to hit the market, or wear the sellers down to the point that they are willing to accept a discount to get it off their hands. Win-Win.
Now, in the second, much worse scenario, there is something glaringly wrong with this "as-is" property, and that is the reason it is sitting. However, the same rules apply. Just wait for it to become a deal. There is always money to be made if you can get it at the right price. Also a Win-Win.
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Aaron Gordy
Real Estate Broker · Austin, TX · Member since 2012 · 1k+ posts · 1k+ votes
7y
@Mo Farraj I guess it really depends upon what you are looking for.
Personally, I like deals where I have limited competition. If the property has just come on the market then more than likely you will be competing with other investors for that deal. I like properties that have been sitting on the market for awhile due to issues. The more issues the better. In fact, I wish agents would just stamp a big fat I for issues on the first picture of the house to make it easier.
In the red hot Austin market I bought a duplex that had issues galore for $385k and fixed those issues and sold a year later for $595k. There were so many issues that the property sat on the market for a year. I love properties that sit on the market for a long time IF its priced right. Sometimes sellers are too proud and price it too high.
I also have bought many houses in a multiple offer situation in the first few days on the market because it was a heck of a deal and I beat everyone out.
Gotta know your market
Aaron
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Andy Brown
Rental Property Investor · Tampa, FL · Member since 2017 · 70 posts · 115 votes
7y
@Mo Farraj
Only been in this for about a year. My two triplexes were both poorly marketed MLS listings. The MLS is still a good source (with some deeper digging) in many cities. I set it up so I'm getting Zillow updates throughout the day and give them a glance on breaks or sitting in long boring meetings. I also will jump on the computer for an hour or so after the kids go down and peruse. I estimate I'll save one house for every 100 I look at. Don't forget craigslist. It's a game for me. I spend a lot less time reading the news (things I can't control) and more time looking at houses (things I can control). Feel free to PM for more details.
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Andy Brown
Rental Property Investor · Tampa, FL · Member since 2017 · 70 posts · 115 votes
7y
@Bruce Runn
Ha! That's such a great way of looking at it, Bruce!
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David Brizendine
Lender · Westlake Village, CA · Member since 2016 · 31 posts · 4 votes
7y
As an agent AND an investor, I would disagree. High price and no reduction shows the sellers motivation more than if it's a good deal. Remember that with so many new agents flooding the market, they are dictating the narrative of the home seller. I would watch the listing, watch for reductions and if/when the listing does expire.... go direct to seller.
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
7y
@Mo Farraj I’ve only bought properties that were listed for a long time and always gotten a great deal. You need to offer what works and see what they do.
[email protected]512-888-9122
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Helen Zhang
Austin, TX · Member since 2016 · 160 posts · 39 votes
7y
@Mo Farraj It doesn't really affect my buying decision, but it will affect my offering decision as what it is telling me is this property's listing price is probably too high.
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Jordan MoorheadBusiness Member
Real Estate Agent · Austin, TX · Member since 2015 · 5k+ posts · 3k+ votes
7y
@Chris Hake most newer realtors only know this crazy market and don’t realize that this only being on the market for days thing is not normal. In typical markets a few months even is not a long time.
[email protected]512-888-9122
The Moorhead Team5140 Reviews
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Nick Rutkowski
Rental Property Investor · Ithaca, NY · Member since 2015 · 1k+ posts · 1k+ votes
7y
@Mo Farraj
When a property is on longer than usual it means the seller is motivated. Start hustling and get a deal going! Good luck!
1 Reply
Philip Lassman
Investor · Montreal, QC · Member since 2018 · 14 posts · 6 votes
7y
On the surface 3 days is not significant enough to call that property cold as far as a deal is concerned. One thing you should ask a local real estate broker (since you will likely not have access to this info) is to research if this property has expired and been relisted on the MLS repeatedly. I have seen properties listed, expired, cancelled, relisted 3-4-5 times in the span of less than a year. Often there is a backstory as too why the property has still not sold and at this point is only being "burned" on the MLS because the Seller has changed brokers each time the last one fails to bring in their price. The obvious 2 questions that should pop into your mind is what's wrong with this property and/or what's wrong with this Seller?
1 Reply
Dante Pirouz
Investor · Almont, MI · Member since 2015 · 361 posts · 302 votes
7y
I love deals that have been sitting on the market for a long time. Often the property is not being marketed correctly (mistakes in the listing, commercial property listed as a residential, horrible pics/description, mold/sewage/bugs or any other issue that can be fixed with time and money). This means that the seller is ready to come to terms and deal. All that matters is if my analysis says that there is value and what the selling price has to be to make the deal work for me and the seller. I bought a property that was on the market for 2 years and dropped from $50K to $20K because it was zoned as a commercial office although it was a 2 bedroom house on the other edge of a nice neighborhood. It was a probate property and the family did not live nearby or want to be bothered with holding it anymore. We bid $12K and got it for $15K. Now it is rented for $850/mo with less than $15K rehab. So the longer it is on the market is no problem for me!
2 Reply
Jeff Morelock
Rental Property Investor · Marianna Florida · Member since 2011 · 357 posts · 169 votes
7y
There are deals on MLS, and a good way to find them is by Days on Market or DOM. I have a specific search set up in MLS to find properties that have been on the market at LEAST 45 days.
Most of the time DOM over 45 days usually indicate an unrealistic or unmotivated seller, but once in a while these folks are more ready to sell than they thought.
Yes it takes a lot of work and a lot of rejected offers to find deals on MLS, but they are there.
1 Reply
Mo Farraj
OP
Brooklyn, NY · Member since 2017 · 53 posts · 19 votes
7y
@Aaron Gordy Great advice, thank you very much for the reply. Its all comes down to knowing your market and good math!
0 Reply
Mo Farraj
OP
Brooklyn, NY · Member since 2017 · 53 posts · 19 votes
7y
@Curtis Mears Thank you for the reply Curtis. I see that you are one of the few who actively buy from the MLS. May i ask what are some of your search criteria you use for properties that have sat on the market a while? Seems as though most investors feel like a lot of the deals come through off market from relationships and such.
What are some of the metrics you use when analyzing a property though MLS (comps, cap rate, rehab cost)? What are some things that stand out on paper to you that tell you "hey this may actually be a good investment"
0 Reply
Mo Farraj
OP
Brooklyn, NY · Member since 2017 · 53 posts · 19 votes
7y
@David DiCenso I really appreciate you taking the time out and replying to the post.
I think you make several valid points. To answer your question - my strategy here is to brrr the properties i invest my cash into. My biggest fear is investing in a home that will not rent and just sit on the market with no interest (hope that is a normal fear for other new investors).
What are some other metrics you suggest a new investor should be aware of when investing? I am currently calculating cap rate, comparable home sales, and overall neighborhood growth. If something has been sitting on the market for 45+ days, would are some other things you may look at?
Thanks,
Mo
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Josh Kredit-Phelps
Salt Lake City, UT · Member since 2016 · 39 posts · 18 votes
7y
@Mike M. @Mo Farraj
Very untrue. I have found all three of my SFH deals off the MLS and several more that are great deals.
No pocket listings. No help from a searching realtor. Watching properties and more importantly knowing the market that you live in will allow you to find good deals regularly
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Josh Kredit-Phelps
Salt Lake City, UT · Member since 2016 · 39 posts · 18 votes
7y
@Mo Farraj
We start at 30 days or more. That will give us a better chance at finding a motivated seller. Several times we’ve put in offers only to be turned down. Then we watched and waited, the price was lowered, we re offered and got the property and ultimately added 40k in equity.
All of this was off the MLS and programmed hot sheets from our realtor.
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Christina Linn
Investor · Member since 2017 · 83 posts · 46 votes
7y
I find that properties that have been on the market for 90+ days - especially 180+ days - are willing to move on price a lot more than those that are fresh. That being said, your realtor or broker knows the market you are purchasing better than anyone who's not in that market does. I bought a house 2 years ago that was listed for 160k and reduced to 120k over several months; the seller's realtor reached out to me since she knows we invest and we offered 90k and the seller accepted!! It was worth the 160k if it didn't smell like smoke and have dog poo on the floor. Since we weren't scared of those things we bought it and rehabbed it for 10k and collect $1525/month in rent! Your market will affect things a lot though.
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Account Closed
Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
7y
Originally posted by @Josh Kredit-Phelps:

@Mike M. @Mo Farraj
Very untrue. I have found all three of my SFH deals off the MLS and several more that are great deals.
No pocket listings. No help from a searching realtor. Watching properties and more importantly knowing the market that you live in will allow you to find good deals regularly
Glad it works for you but our market is too hot for that.
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Account Closed
New to Real Estate · TX · Member since 2018 · 56 posts · 24 votes
7y
@Mo Farraj
Incorrect. What if they dropped the price 10% on the fourth day?
20% on the 90th day.
I'd pay full price on a 90 DOM and yes, even a 365 DOM. I wouldn't even argue the price if the deal was good enough, I may even pay over asking price on a 600 DOM.
Find you a new broker. That is a ridiculous assumption
1 Reply
Mark Pedroza
Real Estate Agent · Sacramento/Placer ~ San Francisco Bay Area counties · Member since 2012 · 1k+ posts · 743 votes
7y
Originally posted by @Dante Pirouz:

I love deals that have been sitting on the market for a long time. Often the property is not being marketed correctly (mistakes in the listing, commercial property listed as a residential, horrible pics/description, mold/sewage/bugs or any other issue that can be fixed with time and money). This means that the seller is ready to come to terms and deal. All that matters is if my analysis says that there is value and what the selling price has to be to make the deal work for me and the seller. I bought a property that was on the market for 2 years and dropped from $50K to $20K because it was zoned as a commercial office although it was a 2 bedroom house on the other edge of a nice neighborhood. It was a probate property and the family did not live nearby or want to be bothered with holding it anymore. We bid $12K and got it for $15K. Now it is rented for $850/mo with less than $15K rehab. So the longer it is on the market is no problem for me!
Well done! This proves that the property was motivated not the sellers..
1 Reply
Harrison Liggett
Rental Property Investor · Greensboro, NC · Member since 2018 · 24 posts · 11 votes
7y
@Mo Farraj
Agreed with what some have said here. Whether or not it’s a deal depends on the buy price. Run your numbers diligently and offer what makes sense for you no matter what the list price is. Prepare to be rejected 90% of the time but that just means you’ve got to go offer on 10 listings to clip a good deal
1 Reply
Ian WalshBusiness Member
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
DOM and inventory can tell a lot about the true price of a property. The question to ask is 'why'.
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