Knock, knock: I'd like to buy your home
Shopping for a home can be frustrating when so few houses are for sale. However, a sharp Realtor can help you locate and buy a home that's ripe for sale, but not yet posted on the brokers' multiple-listing service (MLS) or public real estate websites.
Ken Pozek, a Realtor at Keller Williams Realty in Northville, Mich., says he uses three direct approaches to contact potential sellers:
No. 1: Letters. Mail a letter to homeowners in the area. The letter mentions you by name, tells the homeowners your home-shopping story and tries to induce them to consider selling their home.
No. 2: Phone calls. Call those same homeowners, asking whether they or anyone they know in the neighborhood might be willing to sell you their home.
No. 3: Knock door-to-door. Knocking on doors, house by house, in search of a willing seller of a house you'll want to buy.
You're most likely to succeed if potential sellers perceive a financial advantage for themselves in the deal, such as a reduced sales commission or higher value than they'd thought their home was worth, Pozek says. Money typically is the driving factor, he says.
Another strategy is for your Realtor to network with other agents to find upcoming for-sale homes that aren't yet on the market, says Gary Rogers, broker and owner of RE/MAX on the Charles in Waltham, Mass.
"Real estate is a cooperative business, so you want to beat the bushes with the agents who are most likely to be bringing properties on. If you have a good reputation with them, they're more likely to give you a heads up," he says.
In some cases, you might be able not only to see but also to buy a house before it's put into the MLS, reducing the chances of a bidding war between you and other buyers.
Expired and pending listings
The MLS also can be source of other hidden houses you might want to purchase.
One MLS category is expired listings, known as "expireds," in realty shorthand. These are homes that were for sale weeks, months or years ago, but never sold. Rogers says agents can find addresses and photographs of these houses in the MLS and contact the owners to find out whether they'd be willing to sell their house to you.
Another MLS category is pending sales, which are homes already under contract to another buyer. Sometimes, you can "scoot in" and buy one of these houses if the other buyer hasn't approved a contingency, says Carl San Miguel, broker/owner of Highland Properties in Campbell, Calif.
Contingencies are conditions that must be met for the deal to close. Examples include financing, disclosures and a home inspection.
The contingency that's most likely to result in an opening for you to purchase a pending property is the sale of the other buyer's house, San Miguel says. That's because a buyer who hasn't found another buyer might not be in a position to waive that requirement.
"The seller is saying, 'We have (another buyer) who can close, so either waive your contingency or cancel your purchase.' The buyer then has to make a determination as to whether he can close. That puts some stress on that buyer if they don't have their property sold," he says.
If that buyer backs out, you scoot in.
Questions to ask
To find an agent who'll be willing to find a house for you that's not for sale, focus on real estate professionals who are active in the neighborhood where you want to live.
"If you have your heart set on one neighborhood, pick somebody who really works that neighborhood. Those people will have more seller leads and know the other agents in that area," Pozek says.
Once you've identified several agents, ask how many homes they've sold in the neighborhood and chat with them about neighborhood characteristics. That way, you'll be demonstrating your enthusiasm for the neighborhood and assessing the agent's knowledge of the area.
The bottom line is that a slim supply of for-sale houses doesn't necessarily mean you have to put your home-buying goals on hold. Find a Realtor who's motivated to help you buy a home, even one that's not technically for sale.
Related articles :
More help from HSH.com
HSH.com on the latest move by the Federal ReserveThe Federal Reserve concluded a meeting today, raising the federal funds rate; the target range for the key policy tool is now 1.5 to 1.75 percent.
Home price recovery index: Which metros have improved the most, least?Have home prices in your area fully recovered from the declines suffered during the Great Recession, or are they still struggling to make it back to the peak it reached before the crisis?
How long do I have to own or live in my home to qualify for the capital gains tax exclusion when I sell?You can exclude capital gains on the sale of your primary residence if you meet the IRS's ownership and use requirements.
10 metros where a home costs about $1,000/monthHSH.com identifies 10 metro areas where you can afford the principal, interest, taxes and insurance payments on a median-priced home for only around $1,000 per month.
Metropolitan area definitionsMetro area definitions for the 50 metropolitan areas in "The salary you must earn to buy a home in 50 metros"