The housing crunch: These days, bidding wars are the norm. In June, in fact, almost two-thirds of home buyers found themselves in bidding wars. This trend is the result of supply and demand, with the total inventory of for-sale houses down 31% from this time last year.
The result: The mix of rising prices, low supply and bitter competition make it so much of a seller’s market that people are trying buy houses that aren’t for sale. According to Dana Bull, a real estate agent with Sagan Harborside Sotheby’s International Realty in Marblehead, Massachusetts, the housing crunch is more like a housing drought that in some cases is driving buyers to take “things into their own hands.” This mostly happens when buyers are determined to buy in specific neighborhood and have been unable to beat out other buyers for listed homes. So, they pivot to trying to buy unlisted homes.
The scenario: Buyers (or their agents) send potential sellers offers to buy their homes as a letter in the mail, text, or even by knocking on their door. These offers may include personal information about the buyers, such as family photos and a letter describing why the buyers would like to own a specific house. This tactic isn’t new— real estate investors have been using it for years. It is, new, however, as an approach for single-family home buyers, according to Bull.
What happens next: Unsolicited offers tend to catch owners by surprise. According to Nada Rizk, another agent with Brown Harris Stevens, owners typically aren’t psychologically prepared, nor are they physically prepared, meaning that they have nowhere to go upon a potential sale. If you happen to approach a homeowner who has been contemplating selling, the offer will stand more of a chance.
Because not every offer will land at the right time, you can increase your odds of a successful unsolicited offer by sending out lots of letters, or by targeting your outreach to those who might be more likely to consider them (such as those without young kids).
Factors that help: If you are in the market for a new home and are considering an unlisted home approach, there are some factors that can help, according to Rizk. These include having your finances ready (be preapproved for a mortgage and have your down payment ready), offering cash, and being flexible about moving timeline details like the closing date.
Prepare for failure: While more and more homeowners are reporting unsolicited offers, they aren’t necessarily accepting them. That said, it does work sometimes, and especially if you really want to land a home in a specific neighborhood, it can’t hurt to try.
