Can You Still Find Deals on the MLS? | Think Realty | A Real Estate of Mind
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Can You Still Find Deals on the MLS?

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The real estate market is really hot right now and has been for some time and finding good deals is not nearly as easy as it once was. Back around 2011, for us it was as simple as driving around and looking at one bank owned property after another. Nowadays, such properties are very rare. Indeed, a recent story noted that one house in Washington D.C. received 76 all-cash offers! I’ll remind you, that’s not 76 total offers, that is 76 all-cash offers.

In the market I primarily invest in, Jackson County, MO, there is only 0.6 months of inventory. This is almost unheard of. In a balanced market, there are six months of inventory, which means that there are six times as many homes listed as there were sales in that month. Right now, in Jackson County (and many other places in the country), there are more sales in a month than total inventory. This means most houses are going under contract in less than 30 days.

So are there any good deals left to be found on the MLS?

The Best Use of the MLS for Investors

The MLS, or Multiple Listing Service, is where real estate agents put all of their listings. Only licensed real estate agents can use it, although many of those listings are also put on sites like Zillow, Trulia and Redfin.

Since every other buyer and investor can see these listings, they have usually been picked over and there’s no skin left on the bone (or more accurately, built-in equity to be acquired) in any of them. This is true in normal market conditions and much more so in an extremely hot market like we are in now.

Therefore, the best use of the MLS is to find comparable sales and value a potential acquisition. While the sites listed above can serve the same function, the MLS is by far the best at this in my humble opinion.

It allows you not just to filter properties by a variety of metrics (bedrooms, bathrooms, date sold, etc.) but also narrow the search criteria to a particular area, including irregular areas that exclude properties that might fall within a certain radius but are “across the tracks” in an area that doesn’t compare well to your subject. And then there are all sorts of tools make reports that are easy to evaluate the properties you have selected.

The ability to use the MLS for comping a property is by far its greatest use to investors. But, to answer the original question, there are the occasional gems that can still fall to investors through the MLS.

Buying Good Deals Off the MLS

If you are looking for a home to live in or willing to buy a property at market value, then using a real estate agent or finding properties on the MLS is the first place to go. But if you’re looking for a flip or BRRRR deal, it’s not ideal.

Even still, there are some. In this market especially, though, you will need to act quickly. Good deals won’t last long.

Furthermore, there will likely be multiple offers. Come in with your highest offer for which the property still makes sense. Don’t get caught in the mindset that winning equals buying. Winning only happens when you buy a good deal.

The ones we have found recently have all been rather odd. Usually they are properties with rather odd floor plans (so they turn off homeowners) that need a lot of work but still make for good rentals. But be careful with these. You need to discount them a little as their odd floorplan will not sell for as much as more “normal” properties.

The others are miss-listed properties. For example, we found one house listed at 432 square feet that was also a 2 bed, 1 bath. 432 square feet is absolutely tiny. So we checked it out and it had had a grandfathered-in addition some time back that wasn’t accounted for. The house was closer to 700 square feet.

Somehow it was only listed $39,900 and while it needed some work, it wasn’t a disaster by any stretch. I believe the minuscule square footage scared off other investors and we were able to snatch it up.

But again, it probably wouldn’t have lasted long, so we had to act quickly.

Such properties still exist, and good deals can still be found on the MLS, but it’s rare. Again, the best use of the MLS, especially now, is for comping potential acquisitions. Other methods, such as mailing campaigns and SEO marketing will have more success and finding potential deals. But there are still a few good deals to be found on the MLS if you act fast.

To find out more, please check out our video on the subject and subscribe to our YouTube channel as well.