If you’re struggling to find a deal you aren’t alone. Prices have zoomed past previous highs, and most sellers have enjoyed multiple offers on the properties that they have listed. I sat down with an investor today and he was struggling to find anything listed on the MLS that wasn’t “retail pricing”. The thing that many novice buyers and even experienced investors miss is that there are a large number of duplexes and investment properties that are sold without going on the MLS. A good example of this was about ten years ago, when I was using the MLS to check data, I found that there were 35 duplexes, triplexes or four unit buildings that has sold in the 55414 Zip Code (the U of M neighborhoods). Of the 35 only 7 had made it to the MLS. The 55414 Zip Code is somewhat of an anomaly, however this phenomena happens everywhere you go in any Real Estate market.
Why, on earth, would anyone not list a property on the MLS? I have found that sellers have three major reasons. First, they don’t upset their tenants with dozens of showings, they limit it to just a few. Second, they can test the market without listing the property on the MLS. If a seller puts a market on the MLS, and it doesn’t sell, they put themselves at a disadvantage in negotiating-buyers and Realtors will notice the former listing and will use that information to their advantage. Finally, owners often come to a Realtor like myself that has experience with rental properties, and they will use our network of buyers and agents to find a qualified buyer quickly.
Here is some helpful tips for buyers that are looking to find the next deal:
- Check out some of the non-traditional ways of finding a property. I know a number of them, and a good example would be to drive through the neighborhood you like and look for “for rent” signs. This works especially well in the late Fall and Winter because you will contact owners that are likely less experienced and more likely to be interested in selling when they have a vacancy at this time of year. It is much more difficult to rent right now than other Seasons. You will likely run into owner that is a bit frustrated with the vacancy, and they may have had a bad situation recently with the past tenants-therefore the odd time of the year to be looking for a new tenant.
- In this type of market you have to be patient, yet you need to be ready to make a decision quickly. If you are someone that needs to take a long time to make a decision you will miss out on deals. Absolutely, without question, have your financing in place before you begin looking. If you find the right opportunity and then struggle to get a pre approval for your offer you may be dead in the water.
- Have more than one source. This may sound odd coming from a Realtor, but it is smart to not sign an exclusive right to be represented by an agent when you first begin looking. I have several clients, that I work with, where I don’t have them sign an exclusive agreement. Instead, they sign a non-exclusive agreement. That way, if another agent brings them a deal they can’t get with me, they can choose to work with someone else. If you sign an exclusive contract with a Realtor, technically you are required to pay them even if you didn’t use them to find the property. Please get clarification from a lawyer on this matter if it comes in question.
- Look for vacant buildings, ask neighbors about a property you’re interested in, or even mail people yourself. You can get the “248” list from the city of Minneapolis for vacant buildings. What better opportunity than a property that is vacant?
If you need help, feel free to call me. 612 332 9000