Let's start with your connections. Word-of-mouth can help you when you're searching for a property to buy. The key is to use discretion. If you announce to anyone who will listen that you are in the market for a fixer-upper or a great deal you could unwittingly make instant enemies with the Realtors who want the same type of property themselves, or with the little old lady who's in love with her house, even though she no longer needs its five bedrooms and sprawling, overgrown yard.
Still, keep your ears open. Your pharmacist may mention that her sister's neighbor was thinking about downsizing now that the kids have gone off to college - bingo! Or your banker buddy may admit that he's been thinking about selling but has so many friends who are Realtors that he is afraid of alienating or offending all of them except the one he chooses to list his place. Talk to friends you can trust; I find killer deals through my network all the time.
You've Got a Lead, Now What?
So, what do you do when you hear that a friend-of-a-friend's friend is thinking of selling, or you spot the perfect investment that just happens not to be for sale yet? Write a letter. Explain that by selling directly to you, the homeowner can avoid the hassles of open houses and inflated Realtor fees. Announce your interest, emphasize your qualifications, but don't come right out and broadcast your intent to immediately resell.
People get emotionally attached to their homes, and for good reason. If the owner raised her family there, she may feel strongly that another young family should move in and repeat her history. If the seller built the back deck with his own two hands, he may not be enchanted with your idea of bulldozing it to put in a pool. Do not lie to your potential seller! (You're building a relationship, remember? Referrals are a big part of this business.) And don't fawn excessively over the property to the point where the seller begins to wonder how many other people would be dying to park their Honda in the driveway. Simply state the facts, cordially and professionally.
Think of what you can do to strengthen your offer; then put it in writing. Your letter might sound a little like this:
Dear Mr. and Mrs. Shipwreck,
Greetings! You are receiving this letter today because I (or my spouse or partner and I) have been a secret admirer of your home for the past 15 years. Because I love your property so much, I am interested in knowing if you would consider allowing me to purchase it. I realize it is not currently on the market; however, I am prepared to make an offer that I hope will convey my capacity to facilitate a speedy and successful close of escrow.
If you would be open to selling your beautiful home, some specific components of my offer may give you the confidence to realize I can offer you what no one else can:
- No brokerage fees
- Buyer to purchase property in as-is condition with no requests for repair including Section 1 pest work
- No appraisal contingency necessary
- Seller to lease back property for 30 days at no cost
Please feel free to call me at your earliest convenience. I look forward to speaking with you!