When trying to buy a house this summer, I assumed that our real estate options were limited to houses that were officially for sale.
Well guess what? We ended up buying a house that wasn’t even listed and learned that this home buying strategy is not only possible, but often preferable if you’re buying property in a competitive market.
Here’s how we did it, and how you can too.
How We Bought an Unlisted Home – And You Can Too
The Backstory: My husband and I had been house hunting for months in Alabama and fell in love with a particular property in the popular historic district of Florence. We made an offer the same day we viewed the house, only to be heartbroken to learn it had gone to another buyer (a relative of the seller).
Feeling lost, we scoured Florence for other options, but nothing else was for sale, which made sense, as it’s a coveted area of the Shoals region.
Disappointed and tired of waiting for listings that seemed to sell out days after they went live, we asked our real estate agent, Jody Lanier with MarMac Real Estateif he had any ideas.
It was then that he came up with the idea of looking beyond what was available on real estate listing sites.
We were ready to try it. So our real estate agent pulled out some antennae and quickly found a house built in 1917 that was on our perfect street. My husband and I fell in love with it the moment we set foot on the porch and felt giddy walking inside.
Basically, the sellers had named their asking price, and if we were interested, we could make an offer for that amount – take it or leave it. Since the price was within our budget, we went there, signing and submitting a typical home purchase agreement that night.
In the morning, we had other good news: they had accepted!
It was a pleasure to know that we had concluded a contract without having to compete with other buyers, which saved us a lot of worry and disappointment in the bidding process.
How to buy a house that is not on the market
Buying an unlisted home seems to be a growing trend in hot markets. According Pamela Ermenpresident of Real estate guidance in Norfolk, Va., it’s called “going under the market,” which means digging through housing inventory in a particular area to find unlisted gems where homeowners might be for sale if they receive the right offer.
It just makes sense to “present yourself as a buyer for [a home] before you have to compete with other people for it,” says Ermen, who specializes in such lists.
Here are some tactics that will help make this needle-in-the-haystack process a success.
Find a Realtor Ready to Dig
Buying a home that is not for sale requires more work from the agent than usual. So, to get started, you’ll want to make sure you have an agent willing to go the extra mile. Here are some of the actions taken by officers.
- Review expired listings: This is where your realtor digs through expired listings to see who’s ever had their home on the market, checking to see if it’s ever sold. If not, then your agent can contact the sellers and see if they are ready to sell now.
- Check tax records: Your agent can also search tax records in a particular neighborhood to see who has an address for tax filings different from the address of the property. This suggests that the house is vacant or an investment property.
- Send a mail merge: This involves a realtor sending postcards to homeowners in the neighborhood or zip code you want to live in, inviting them to get in touch if they are open to receiving offers on their home. Since part of the appeal might be that the sale could be easy and virtually painless – no need for home staging or open houses – the postcard should emphasize that the agent has “fully qualified buyers” ( like you) who are interested in a “quiet sale”. .”
- Neighborhood prospecting: This is where you and your agent drive around a particular neighborhood, noting the addresses of homes that, if on the market, you would like to see. During the COVID-19 pandemic, buyers can also do this themselves and then forward the list of addresses to their agent, who can then contact those owners.
While a real estate agent should use many of the tactics above, homebuyers can also do a lot to improve the odds of finding an unlisted property they’d like to buy. Here are some tactics we tried.
Commit to buying a house in a particular neighborhood
If a realtor is willing to go the extra mile to find you an off-market home, pledging your commitment to that person is a no-brainer. Stay loyal to this agent so that his work pays off.
In our case, our realtor showed us about 15 homes this summer, so we knew we would only work with him on a sale to make it worthwhile.
When an agent finds you a home off the market, be ready and willing to go see it at any time. In our case, our agent urged us to get going ASAP, before the sellers potentially change their minds about selling. Ermen says she once showed a house off the market at 10 p.m.
Manage your mortgage in advance
Ermen says it’s a good idea to get pre-approved for a home loan and have that letter from the bank on hand to submit with your offer. It proves that you are serious and that you can put your money where your mouth is.
Decide what you are ready to do
Get crystal clarity on your budget and what you’re willing (and not ready) to do to secure a home before you go down the off-market listing path, Ermen says.
The advantage of buying a home this way means that you will hopefully avoid a lot of back and forth, as in a typical sale, and the worry of competing with other buyers. But that doesn’t mean you can necessarily accept an offer well below the demand. If you’re in a competitive market, you’ll have to ask yourself: what am I willing to do to buy this house?
Don’t assume your salesperson won’t play the field
Even if you’re the first buyer to come knocking on a landlord’s door, don’t assume things will stay that way once you pique the seller’s interest in selling.
“You have to assume that a seller is smart enough to know that they could get more money with more competition,” Ermen says.
We will also have to be ready to make an offer quickly, as we have done. Be fair, legitimate and direct in your offers.
“You know what they say,” Ermen said. “If you’re going to sleep on it, you won’t sleep in it.”