How to Find Great Investment Properties Before Anyone Else
Homebuyers are not alone in missing out on potential properties. It happens all the time; you find a property in your price range after weeks or months spent searching for the right home but then realized the tough competition and inflated offers and hope can easily drain away. So how can buyers be more on the ball and get a head start finding the perfect property?
Most real estate buyers rely on property websites, which is their first mistake. Most amazing properties never even make it to the Internet. Did you know that nearly 50% of properties purchased by larger real estate companies are not ever publicly on the market? If you have a real estate brokerage that you stay in close communication with, they may find you the right property without you even having to do one click of a mouse or search one real estate website.
Searching off-market gives the buyer or investor significant advantages. There are less competition and more room for negotiating on price and terms. So besides real estate agents, how can you find an off-market property?
An off-market property is one that is not publicly advertised for sale. There are typically four types of off-market properties: premarket when the property is coming on the market but has not been prepared or photographed yet. A private sale, where there are no agents involved and it never goes on the market typically due to a homeowner trying to avoid paying commission. A silent sale is where a sale is made through an agents database only and there's no intention to market the property public, usually used for high profile clients or celebrities. Post-market, which means that the property was previously for sale and has withdrawn the public marketing of it even though it's technically still for sale.
So why would a homeowner even consider an off-market property?
Off market deals can be great for attracting qualified buyers that are seriously looking for that great property. There are also convenient. Homeowners may not want everybody milling through their house during an open house or even making appointments to come to see the property. They only want serious buyers making appointments to their agent. Off market properties are more discrete and better for high profile people or because of some financial distress, divorce, or death.
Off market properties can be great because they are less expensive. Many people don't need to spend thousands in marketing or styling and if it's a private sale, no agents will have commission fees either. Pocket listings are another off-market type of sale where an agent knows that a property is going to be listed and already has a buyer to connect with the seller. It could be quicker to conclude than a typical sales campaign.
Finding these diamonds in the rough does take a little bit of research on the buyers part. It's important to be proactive and build a great relationship with your real estate broker. Talk to and interview several different agents and find out how they get their listings and if this is a good fit for your real estate investments. Talk to property managers and see if anyone's planning on selling a property in the near future. Consider sending a letter to a home you've been eyeing asking if they plan on selling and if they could talk to you when they decide to do so.
It does take a little bit of digging and research in both finding the right buyer's agent to represent you and the right property. When you have both working together, you're likely to find some great off-market deals that you never knew were for sale.
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