Hello BP, with austin home prices soaring through the roof every month I was wondering if anyone who does their own marketing, driving for dollars, etc was having any success purchasing off market homes? It seems like it would be foolish for homeowners to not list their house on the market and let the bidding wars drive up the value...but maybe some are unaware. Also the amount of investors/buyers doing their own marketing has to be staggering in certain areas. Any thoughts here?
And when those people sell, where would they go given low inventory?!
Not everyone can buy a house from a seller that owes more than it is worth. Yes, even in these market conditions that is possible.
Some people are also very private, don’t want tons of people running through their homes, afraid of covid, don’t like dealing with pushy real estate agents, etc. The reasons that someone sells off market now are the same as ever before.
Need to remember the reason we buy off market deals is to help people out of tough situations and solve problems not to take advantage of them. This is why we serve a value to the community. If you are guided by the right morals you will be successful. If you are trying to steal grandma's house from her....not so much.
I've only done two off market deals but I found them by socializing with my network the type of transaction I was open to - buying for 6-10% below FMV for turnkey to needs paint and floors.
Here is how I look at it - Almost everyone interested in selling would accept an off market offer within 6% of the price they would get through traditional listing because they wouldn't need to involve a realtor. Many people interested in selling would accept an off market offer within 8% of the price they would get through traditional listing for convivence. Some people might accept at 15% below the price they would get through a traditional listing for security and peace of mind.
To be successful you need to show the seller you are creating value for them too. I think the best path is to be upfront about wanting a discount in exchange for the seller being able to get this over with. This allows you to be more realistic with what you think the house is worth and support it with data. In my opinion if you try to convince someone you are offering what the their property is worth and they think you are off by 15% then you will get nowhere because trust is not there.
@Michael Bruns There are plenty of deals happening off-market. For many reasons, they want lease back, owner finance, don't want to deal with realtors, buyers, multiple offers, etc. Network, find a good pocket, and there are still deals to be found in Austin area. You just have to work hard and connect.