Before I moved to Houston I didn’t believe investors when they said they found their last deal on the MLS (multiple listing service). I thought for sure they were lying. In many markets deals on the MLS are often sold for above market.
After moving to Houston, I spent a lot of time searching on the MLS, calling agents every day, putting in lowball offers, basically wholesaling off of the MLS. Here’s what I can tell you. The deals are there. One piece of advice: Follow up, follow up, follow up. I can’t preach follow up enough. Some of our deals have been negotiated over 13 months! When it comes to renting vacant units, working off market leads, nurturing a potential private lender, trying to get a deal on the MLS, etc., it all comes down to the follow up. The truth is 90% of people won’t make that call for the 6th time. They forget or they’re lazy.
Here’s how we close cash flowing deals from the MLS for our investors interested in purchasing more single family:
1. Set up drip campaigns.
You need to be one of the first to know about a potential deal. This is very simple to do. If you’re not an agent, ask us to set up a drip campaign so you receive New to Market and Back on Market properties ASAP. Make sure you know your criteria (we recommend blue collar neighborhoods 3 bed 2 bath).
2. Call the listing agent.
Create a relationship with them right off the bat. You would be shocked at the amount of agents that will simply email an offer over to listing agents because that’s what the agent notes in the MLS told them to do. Create a relationship with them.
Even if it’s a call as simple as “Hey this is Kaelyn with StageCoach Equity. I have a client possibly interested in your listing on Main St. Have you been getting a lot of interest? Why are they selling?” Agents love to spill information. We ask them a full set of questions, but the most important piece is getting them to like you. We also prep them for a low offer. If you haven’t read “Never Split the Difference” by Chris Voss, I highly recommend it. He has some great techniques you can use to help negotiate real estate deals.
3. Put in an offer immediately.
Maybe the seller needs to sell quickly. They may be under contract to purchase a new house and willing to take a lower price offer if it means moving on to their next home. Be sure to submit an offer so the listing agent knows you’re serious. It opens the door for conversation down the road. Yes, I’ve had agents laugh at me, cuss at me, and even hang up on me. But putting in an offer right away starts the relationship and makes it easier to have a conversation later down the road when the house isn’t selling.
4. Follow up in two weeks.
Follow up with the agent and see how showings are going. Have they received any offers? Let them know your offer still stands. If they’ve gone under contract and fallen out, ask if they have the inspection report. They don’t always have it, and have no obligation to give it to you, but it can’t hurt to ask.
5. Follow up every 10-14 days after that.
Keep consistent contact. Especially if it’s a house that needs some work. I’ve closed deals on the MLS I followed up with for over a year.
6. Don’t be afraid to put in backup offers.
I don’t know why more people don’t take advantage of this. Especially in today’s market with so much funding falling through, it’s a good idea to put in a back up offer. It gives you first right of refusal if the transaction does fall through. And you as the buyer have no obligation to continue with the offer.
7. Keep a CRM.
It becomes very difficult to remember every property you’ve put an offer on. When agents accept another offer, I always ask how long their option period is and usually follow up a day or two before their option period is over. There are free CRMs such as Podio that can be set up cheaply and keep track of deals. If you are looking at just a few properties you can also look at Excel or have us do it for you!
8. Keep track of the deals you lost out on.
A lot of times you’ll be frustrated to see the property closed just a few thousand dollars above what you offered. Once you start tracking this, you’ll realize those few thousand dollars would have been worth the house. A couple thousand dollars typically doesn’t matter in the long haul.
Working deals on the MLS takes a lot of time and commitment. You’re not going to get the first deal you offer on. Just like anything else in real estate, it takes time, but it’s worth it.