Making An Unsolicited Offer For An Unlisted Home

Reblogger
Real Estate Agent with Hillscape Properties, Inc. DRE#01452976

Being a buyer in a seller's market can be more than frustrating, but thinking a bit outside the box can be fruitful.  This is great step by step advice to find the home you want in a market that challenges buyers.  Your agent can help you identify prospective sellers before their home is on the market.  I actually found my own home by sending a letter to the owners in the sub division I was most interested in buying.

Original content by John Souerbry 01370983

Making An Unsolicited Offer For An Unlisted HomeHave 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 are snatched up quickly when they do.  But must we really have to wait for great homes to come on the market before we can buy one in a great neighborhood?  Nope.  We can try making an unsolicited offer for an unlisted home.

A growing number of homes are sold in response to unsolicited home purchase 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 of one approach.

Identify Preliminary Target Neighborhoods.  Write down the most important characteristics of your potential new location.  Schools, work commute, noise, traffic, and potential for future price appreciation are often important considerations.

Meet With Your Broker.  Share your selection criteria with your broker and identify neighborhoods that might meet your needs.  Discuss current home values in those areas and any other costs that might be associated with owning a home there, such as homeowner association fees, special taxes, etc.  Review recent sales activity in the area.

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 home ownership.  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 Broker Again and Create A Target List of Properties.  Refine your search criteria and begin driving neighborhoods to identify homes to add to your target list.  Submit candidates to your broker regularly so that each can be researched regarding size, features and the most recent sales activity.

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 your first round of offers, do the deepest research on just the top two or three properties on your list.  For these properties, establish price and term strategies.

Develop A Story.  Why should someone who has not already put their home on the market now want to consider selling to you?  Unless you come in with an above-market price, many won’t.  But some may be motivated by the opportunity to help others while they see a silver lining for themselves.

Make Inquiries.  Beginning with the top property on your list, have your broker submit inquiries to determine if the home owner is interested in looking at an unsolicited offer.  If they reply that they are, probe carefully to find out why so that you can address their specific needs or motives in your offer.

Develop A Strategy.  Your strategy is the approach you use to link your story with the home owner’s needs.  The more information the seller provides in response to the initial inquiry, the better you can tailor a strategy that motivates the home owner to consider a sale.

Submit Offers.  Submit only one offer at a time.  Try to present the offer in person with your broker.  If the homeowner’s preference is to have the offer delivered, submit it with a single page summary that explains your story.  Most residential purchase offers are valid for three days; make your offer valid for at least a week, maybe two.  This gives the homeowner time to hire a broker, analyze the offer, and make a decision to sell.  Your offer is, of course, subject to inspection and you’d need to do a walk-through prior to negotiating if the homeowner does decide to sell.

Keep Making Offers.  If your first offer is rejected, move on to the next property on your list.  Expect a lot of rejections and owners that just plain won’t respond.  Too many brokers use the “I have a buyer for your home” letter as a standard marketing piece, even when they don’t really have a specific buyer for the property.  Owners have become used to depositing those letters immediately into the trash.  Your broker will need to develop a more unique approach that gets the owners attention and lets them know you’re serious.  Success with unsolicited offers is often a matter of timing.  Continue to scan the MLS and other listing sources, but you’ll also want to keep making unsolicited offers as you find additional unlisted homes that fit your needs.

I hope you found this information helpful.  If you have questions about making an unsolicited offer for an unlisted home or buy/sell/investment strategies, drop me a line!  Contact Us.

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John A. Souerbry & Associates (DRE 01370983)

 

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Comments (7)

Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Melanie, I saw this post and it doesn't make sense to me.  Talk to your broker before you do it and be sure to get a commitment in writing from someone-either the buyer or seller--to get paid.  Otherwise it's a whole lot of work for a 'thanks for finding me a home', but no $$.  I am doing a mailing for an investment property, but no one needs to move out of their primary residence--a major event in my mind.

Jun 13, 2013 03:52 PM
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Wow, that's an amazing sytem. Evey market is different, could work in some areas and probably not in others.

Jun 13, 2013 07:45 PM
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
That's a good point, Lloyd. I use lists of out-of-area owners who may be open to seling. You're so right, Joe, about how different every market behaves.
Jun 14, 2013 12:18 AM
Kathleen Daniels, Probate & Trust Specialist
KD Realty - 408.972.1822 - San Jose, CA
Probate Real Estate

Melanie,  I've been receiving a tacky postcard every few weeks from an agent advising that they have buyers and if I am interested in selling ... call!  I agree with Lloyd that it is a lot of work and does not come without expenses.  If it works, it's great for the buyers and of course, the agent gets paid.

Jun 15, 2013 01:22 PM
Jon Kolsky
Kolsky Realty & Management - Long Beach, CA
Licensed California Real Estate Broker

Melanie~ I just wanted to say hello, and I am glad I did "great post" Branding our name is vital to having a better business, IMO!

Jun 18, 2013 12:55 AM
Melanie Narducci
Hillscape Properties, Inc. - San Francisco, CA
Your San FranciscoBay Area Real Estate Expert
Thanks for stopping by Jon; I'm still getting the hang of all this SEO :)
Jun 18, 2013 03:35 AM
Lisa Friedman
Great American Dream Realty - Essex, VT
30 Years of Real Estate Experience!

Great post, Melanie! I sell a few homes a year with this strategy, and also wind up with a few listings because of it as well.

Jan 23, 2014 07:07 AM