Have you ever had a door slammed in your face? I have, and it wasn’t my proudest moment.
Early in my real estate investment career, I read a lot of advice, and all of it said that approaching off-market houses and distressed properties was a good move. But what it didn’t say was how to approach them.
I did the research anyway. I purchased the lists. I found a property that I really loved that was behind on taxes. And I knocked on that door with an embarrassing amount of confidence.
“Are you the homeowner?” I asked the elderly woman.
“Yes,” she said, looking around for a vacuum I might be selling.
“I’d like to make an offer on your property.”
“It’s not for sale.”
“I know, but I’d still like to make an offer.”
“It’s not for sale!”
Slam. And that was it.
It occurred to me later that a property that was behind on its taxes might have other worries, and that I might be challenging people in their most vulnerable moments. As a real estate investor who really focused on making the community better, that was the last thing I wanted to do.
How to Make an Offer on an Off Market House
I had a lot of learning to do as a young investor. The first thing I learned is that an off-market house is off the market for a reason. Even though the property may be distressed, its owner may not be interested in selling. Even if they are, they’re likely going through a tough time—such as bankruptcy or divorce.
Still, with enough curiosity and empathy, you can determine whether you might be able to help these people while still reaching your investment goals. An off-market house doesn’t just present the best deal; once a house is on the market, it’s usually a lost cause.
Why Does a House for Sale Say “Off Market?”
On real estate listing sites, a house will be labeled as “off market” if it isn’t on the MLS. An “off market” property could be truly off market (not for sale), or its owner could be selling it without the help of a real estate agent.
If you see a “for sale” sign in front of a property but it’s listed as “off market,” it’s probably an FSBO property. Many real estate investors look for distressed properties—properties with tax debt or other related issues — that are off market but might need to be sold.
How Do You Negotiate a House Off the Market?
To avoid offending someone with your offer, your first step should be to determine whether the buyer even wants to sell the property. It’s a delicate conversation; simply asking someone if they want to sell their house when they’re going through a difficult financial time can be considered offensive or insulting. Here are some tactful ways to approach the situation:
- Many real estate investors test the waters first by sending mailers, calling owners, or even texting them. Gentle language can be used to avoid offense, such as “I saw your house and I love it! Would you be interested in selling?”
- Avoid being presumptuous. Don’t mention that you know the property is distressed, the owner is behind on their taxes, or that you found their name through divorce records.
- Because the property is off market, you have to be confident in your own calculations when making an actual offer. Inspect the property thoroughly, look at comparables, and estimate how much you could make on the property.
Even with all your ducks in a row, it’s likely that a lot of the people you try to connect with aren’t going to want to sell their houses. Ideally, you really want someone to come to you directly and say, “My home isn’t on the market, but I want to sell it. How much can you offer me?”
Benefits and Drawbacks of an off Market Offer
Even with all those pitfalls in place, why do some people still want to make off-market offers? Once a property is on the market and on the MLS, a lot of its investment potential simply isn’t there anymore. You’re competing with other investors, owner-occupants, and landlords.
An off-market offer has many benefits. Often, the property can’t be brought to market because of certain issues—like major repairs. You don’t get into a bidding war or have to compete with other buyers. And you can often close the deal faster because a real estate agent isn’t involved in the process.
The major drawback of an off-market offer is that you need to find them. Finding properties that aren’t on the market but that the owner wants to sell can be a challenge.
Get Off Market Properties to Come to You Instead
When I was a young investor, I was all alone. Today, I have HomeVestors®. As an independently owned and operated HomeVestors® franchisee, I find that negotiating is so much easier when people are already familiar with your brand.
Through the HomeVestors® brand, I underwent an initial week-long training course that taught me how to better negotiate with off-market sellers. I also have access to its proprietary valuation software, ValueChek®, which helps me find the right offers to make. And with a complete lead generation platform at my fingertips, having sellers come to me isn’t as hard as it used to be.
When someone is distressed, ready to sell their house, or just doesn’t know what to do, they search for me and give me a call. And the result? No more slammed doors.
If you want to find the best off-market properties without having to go door to door, HomeVestors® can help. Request more information by contacting HomeVestors® today.
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