5 Ways To Find Deals On The MLSBy Paul Esajian on November 19, 2018
Real estate investing, and lead generation are constantly changing. A hot lead source today can quickly fall by the wayside and become an afterthought. It wasn’t too long ago that the MLS was the go-to property source for many investors. Their real estate agent would contact them as soon as they received a new listing alert and they would run to beat their competition to the property. While the MLS has fallen off in terms of exclusivity and demand, there are still plenty of good deals to be found if used properly. It may take a little due diligence, and some follow up, but the MLS is still a great resource of finding deals. Here are five ways you can use the MLS to build your pipeline and secure your next big deal (Whether you have MLS access or not).
- Expired listings. The only way potential MLS deals work is if you are on the same page with your real estate agent. Unless you are a licensed realtor, you are going to have to lean on them to help navigate the MLS. The first niche within the MLS you should look for are expired listings. As the name indicates these are the listings that have tried their way in the market without any success. There are several reasons a listing goes unsold and eventually expired. It could be because of an unrealistic price, poor marketing, worked needed in the property or simply bad timing with the listing. No seller wants their listing to expire. At this point they may see things in a different light and be open to negotiation. If there is true motivation to sell you may be able to catch a seller at the right time and get the property at a number that works for you.
- Days on market. We have grown into a society that is incredibly impatient. We want immediate results, feedback and progress in whatever it is we are doing. Listing a home is no different. If a seller doesn’t get an offer at the initial open house they will begin to question everything about the listing. The longer a home sits on the market the less negotiating power they have. Buyers know that sellers lose patience quickly and the property may be having trouble generating offers. Typically, around the 60-day mark of the listing is when sellers start questioning everything. If you come in with a cash offer that can close quickly you may be able to secure the deal. At nothing else you will at least get the negotiating process started and see where you stand. You may not be able to come together on a deal today, but you should track the property and revisit it again in a month. If the listing is still online in 30 days, the seller may come around to your price and want to take what they can get and move on.
- Price reduction. If you watch any of the various real estate or rehab programs on TV, you know how much they stress pricing the property right. With a property that is priced right from the start there is instant demand and often a handful of offers. On the flip side, if a property is listed too high demand will be reduced and sellers will have a tough time generating any interest. Eventually they will have to consider a price reduction more in line with the current market to jumpstart the listing. For buyers, this is a red flag that jumps off the page. They know that the seller has conceded their value is not in line with reality. It is a good indicator that demand is poor and they are not getting offers. They also know that the listing has been on the market for some time and they are willing to negotiate. Price reductions should be met with an offer.
- “Needs work”. It is not enough to glance at the listing price and move on. You should take the time to read the comments and see if there is an angle with the property. Many times, the seller, and their agent, will provide clues as to what is going on with the property and what they will accept in the comment section. A listing that states the property needs TLC, or to bring your imagination is an indicator that work is needed. Someone who has lived in the home for years may be immune to just how bad the condition really is. You don’t want to rub it in their face, but if the cost of repairs is more than they think it is possible they would be open to an offer.
- Short sale. It is no secret that the volume of short sales has dramatically declined over the past decade. That being said, there are still a handful of short sale deals out there. In the comment section of the listing it should sale short sale approved or needs bank approval. There is a big difference in the two. If the property is short sale approved the seller has gone through the process of submitting financial information to the lender and they have already approved the value. If the property needs lender approval you may have to wait for the seller and the lender to approve the deal. This process could easily take a few months. However, if you are willing to wait it can be worth it.
Scouring through the MLS can still be a great way to find deals. Use these five tips to help find your next big deal on the MLS.