Good homes are in short supply. Have you been looking for longer than you would like and still can’t find the right home listed for sale in the neighborhood where you most want to live? The simple fact is that homes in the most desirable areas don’t come on the market very often and they disappear quickly once they do. But do we really have to wait forever to buy in these neighborhoods? Nope.
A growing number of homes are sold “off market” or in response to unsolicited offers. Statistics vary greatly by location, but we know that many homes are sold without ever making it onto the Multiple Listing Service (MLS). These could be homes “For Sale By Owner” or “pocket listings” that sellers want their agents to market out of the public eye for personal reasons. Some homeowners haven’t considered selling, but might if they receive a good offer – they are potential targets for unsolicited offers.
The process for making an unsolicited offer is not unlike how we would go about making an offer for a listed property. Let’s look at an overview.
Meet With An Agent. Get a feel for what is available in the market at different price levels in different areas and neighborhoods. Even though you may not be placing an offer on homes currently for sale, those homes – and recently sold homes – will have an influence on the appraised value of homes you may attempt to buy.
Get Pre-Qualified. Meet with a financial planner to create a family budget and establish financial boundaries for the purchase and long term costs of the home. Then meet with at least three different mortgage lenders to determine the buying power of your budget and to shop for financing that best fits your needs.
Meet With Your Agent Again and Create A Target List. Define your search criteria and begin driving neighborhoods to look at homes to add to your target list.
Prioritize The Target List. A long target list of properties is better than a short list, since most unsolicited offers are initially rejected. To save time on our first round of offers, we’ll do the deepest research on just the top two or three properties on our list. For these properties, we establish targets for prices and terms that will be used in our offers. We’ll use county records, past MLS listings, and other sources to collect information about the properties.
Submit Offers. Starting with our top property, and submitting only one offer at a time, our agent will contact the homeowner to ask if they are agreeable to receive an unsolicited offer. If yes, we’ll first seek to present the offer in person with our agent. If the homeowner’s preference is to have the offer delivered, we’ll submit it with a single page summary that explains why we are making the offer (kids in a better school, shorter work commute, need more space, etc.). Most residential purchase offers are valid for three days; we’ll make our offer valid for at least a week, maybe two. This gives the homeowner time to hire an agent, analyze the offer, and make a decision to sell. Our offer is, of course, subject to inspection and we’d need to do a walk-through prior to negotiating if the homeowner does decide to sell and counters our initial offer.
Keep Making Offers. If our first offer is rejected, we move on to the next property on our list. Success with unsolicited offers is often a matter of timing. We’ll continue to scan the MLS and other listing sources, but we’ll also keep making unsolicited offers as we find off-market homes that fit our needs.
I hope you found this information helpful. If you have questions about unsolicited offers or buy/sell/investment strategies, drop me a line! john@jsrealproperty.com
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John A. Souerbry & Associates (DRE 01370983) www.jsrealproperty.com
Keys: California homes, California real estate, Silicon Valley homes, Napa Valley homes, Bay Area real estate, making unsolicited offers
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