Five Tips to Get Great Deals On the MLS (Including Buying Houses on Friday…?)
I buy almost all of my houses off of the MLS.
I have tried direct marketing, wholesalers and other methods to get great deals, but the MLS seems to work the best for me. So why am I finding so much success with the MLS when others are struggling?
Here are the the top five reasons I can get a great deal over someone else trying to buy in my area.
1. Being a Real Estate Agent Lets Me Act Quicker Than Other Investors
I already wrote an article about the benefits of being an agent and investor here. The truth is I see the MLS multiple times a day, I can look at a house without calling an agent and make an offer with the help of my assistant less than two hours after a home is listed. To be honest, this puts the rest of you who are not agents at a huge disadvantage when buying off the MLS. I know acting quickly has gotten me many deals that I would not have gotten had I waited a day or two.
2. Buy Houses on a Friday…. What?
My last three deals I bought off the MLS were listed on a Friday.
I noticed this trend on the last deal, because I kept accepting counters over the weekend. I try not to work on the weekends, but I am happy to do some work if it means I am buying a new rental property or fix and flip. It could just be a coincidence, but the houses I bought were listed on a Friday and I was receiving counters before anyone else made an offer. My thoughts are that most people start to zone out Friday afternoons and don’t feel like driving to a house, writing an offer and sending it to the listing agent (It could be that many real estate agents do not want to do this on a Friday either). People think I can look at that house on Monday, it will still be available.
My last deal was listed Friday afternoon of last week. It was in a town 30 miles from me and I really didn’t want to drive out there, but the home was listed for $60,000 less than similar houses in the area. I saw the home, had my assistant make an immediate offer 20% below list and we sent it to the seller. I made a low offer because this was a really bad house. It looked like someone had thought about flipping it, got to the demolition stage and gave up. On Saturday I received a counter at $75,000 and I accepted it. The listing agent said they had five showings set up over the weekend and were expecting more offers, but none had come in yet. Had I waited to make an offer until Monday or even the weekend, I would have lost the house or been faced with multiple offers. Two of my other recent purchases went down the same way with the seller getting me a counter on the weekend before any other offers came in. FYI, these are fair market listings, not REOs where most banks require a property to be on the market a certain amount of time before they look at offers.
3. Remove Your Inspection Contingency
Removing the inspection contingency is a risky move if you don’t know what you are doing.
I started doing this recently because I rarely, if ever, do inspections on my purchases. I want great deals when I buy a home and if something comes up in an inspection that would cause me not to buy it, I probably am not getting a good enough deal. Major issues like foundation and roof I can usually spot myself. That is why it is extremely important to know what you are doing when you remove an inspection contingency. Here is an article I wrote on if an inspection is necessary.
Removing an inspection contingency is huge in our market right now. On every house I sell I get hammered with inspection requests. It seems like the in thing to do is to ask for every single thing an inspector finds and then some. Many of the houses I buy need a lot of work; I think the biggest fear many sellers have is getting an accepted contract and then having the buyer ask for $10,000 off the price after their inspection.
4. Watch the MLS Like a Hawk for “Back on the Market” Listings
Two of my recent fix and flip purchases were under contract before I got a chance to make an offer on them. I know, I just said how important it is to act fast, but I have a valid excuse. I was in Mexico on vacation for one and they other was in a town I normally don’t buy in.
When those properties came back on the market I made offers immediately and got them under contract before any more offers could come in. By quickly, I mean that same afternoon after the homes came back on the market. The listing agents were actually apprehensive because they did not believe I could have seen the house and made an offer that quickly.
5. Don’t Limit Yourself to Certain Types of Listings
I see investors mention on the forum they are focusing on buying REOs or short sales. REO and short sale activity is way down for most areas of the country and it seems silly to limit yourself to any type of sale.
Some of my best deals have been fair market listings. Fair market meaning they were not distressed due to a short sale situation and they were not bank owned. In the last year I have bought fair market listings more often than I have bought short sales or REOs.
With our prices rising, I am seeing houses under priced by real estate agents. These are the properties that you can get an offer in on quickly and get under contract before anyone else has a chance. I do not ignore REOs or short sales, but I don’t focus on them either.
I focus on price!
Conclusion
Act quickly, don’t limit yourself to REO and don’t take three day weekends and you just may get more deals.