Some buyers are getting creative when low inventory levels threaten to crush their home-buying dreams: They’re writing letters to homeowners, asking if they’d be interested in selling.
That’s what Will and Jung O’Donnell did last year.
After unsuccessfully searching for a home in San Francisco for months, they switched real-estate agents. Their new agent helped them find listings that expired years ago — including the one they’d eventually buy. The agent then presented the owner with a letter of interest from the couple.
The O’Donnells are now happily living in their Lower Pacific Heights home.
Hey, if you don’t ask, you’ll never know, right?
But for those on the other side of the transaction, the homeowners, getting an unsolicited offer for your home can feel a little strange. Maybe even a bit creepy.
“Nine out of 10 [homeowners] will say ‘Thanks, but no thanks,’” said Brendon DeSimone, real-estate expert for the website Zillow, and an agent licensed in California and New York.
If the home was on the market a couple of years ago, then removed, many times the homeowner is on to plan B; maybe they’ve built an addition to create the space they needed or they overcame an objection they once had about the home, DeSimone said.
But sometimes they’re still interested in selling the property. Perhaps they decided to rent out the place instead for a while, but really don’t want to be a landlord. Or maybe they weren’t willing to part with their home at post-housing crash prices, but would be satisfied with their return now.
Granted, this strategy isn’t popular everywhere. But in places where the inventory of desirable homes is tight or for highly sought-after properties, it isn’t all that unusual, real-estate agents say.
Alyssa Hellman, who lives in a historic condominium building in the West End neighborhood of Washington, D. C., gets letters from people interested in buying her home every few months. “Maybe even once a month, when the market is active,” said Hellman, a real-estate agent with Long and Foster Real Estate, based in Arlington, Va. Apartments in the building — and especially units with certain layouts in the building — are highly sought after, she said.
Read: Why some homes have a secret ‘For Sale’ sign.
“I don’t exclude the idea of selling if the right person or offer came along,” she said. But the right offer is a high one. “I’m not going to sell it at market rate, because I really don’t want to move.”
If you get such a request to sell your home — and you’re interested — keep the following in mind.
Make sure there are real buyers
Often, real-estate agents will look for expired listings and reach out to their owners in an effort to drum up some business for themselves. It’s a way they accumulate properties to sell.
In fact, in San Francisco, the market is so tight, real-estate agents will come knocking if they see the landscaping isn’t being cared for (which could indicate the home is headed for foreclosure), or if the outside appearance of the house in any way suggests that the owners may be ready to move, said Mary Macpherson, a real-estate agent with Paragon Real Estate Group in San Francisco, and the one who helped the O’Donnells buy their house.
That’s why you need to find out if there are actual buyers ready to deal.
When you get a call or mail from an agent asking you to sell, ask who the buyer is and how long they’ve been looking, DeSimone said. If you’re not sure what to do, call your own real-estate agent — perhaps even the one who helped you buy the place — for advice.
To prove the existence of real buyers, Macpherson may provide a photo of the prospective buyers, along with their letter asking to purchase the home. “Sometimes, I think sellers think we’re just making up an imaginary buyer so we might be able to get a foot in the door,” she said.
You are in the driver’s seat
“Sellers in this scenario can often name their price,” Hellman said.
Of course, that doesn’t mean a buyer will pay it. But you can decide what price will make you move.
And in highly competitive markets, you may get it.
“The second you go on the [multiple listing service], dozens of buyers are competing,” DeSimone said. If they’re tired of looking and are planning on being in the home for a long time, the buyer might not mind paying a higher price.
Consider listing the home
If you’re getting interest without even listing the home, just imagine what you might get with full exposure, Macpherson said. By listing a home on the multiple listing service and marketing it online, you have the potential to bring in more than one offer. But by dealing with a buyer who approaches you, there’s a danger that you could be leaving money on the table.
That’s why, “unless they have a strong reason why they don’t want to,” Macpherson would advise people interested in selling to list their home before committing to a contract.