Supplementing the search: Should you write the owner?May 29, 2014 @ 10:13 am
"Three girls and dad looking for house to buy. Erin, Laura, Jill and their dad are looking for a house to buy in this neighborhood. . . If you (or someone else that you know) are thinking of selling your home in the near future, please give us a call - we can both save some trouble and expense. Thanks a lot."
It had been several years since I'd seen, or personally received, a note like the above. But given the lack of inventory in some neighborhoods and the reported bidding wars, I certainly understood the effort.
Do notes like the one above, which was recently distributed in a friend's neighborhood, have any success?
The answer is "sometimes" but not necessarily for the reasons mentioned. It could be good idea to send similar fliers to homeowners in the neighborhood you are completely sold on, but use your personal inquiries to supplement the work of a competent, knowledgeable agent. Personal notes expand your possibilities, but a well-connected agent could be the key to getting a house in an area you desire.
For example, I once knew an individual who represented a small investment club that wanted to buy rental homes in a specific, 15-block area of town. He felt the area would greatly appreciate and said that any neighborhood with sidewalks, tree-lined streets and a community park was a sure bet. He drove down the individual streets, wrote down addresses that looked appealing, and then visited the county courthouse. There, he obtained the owner's name, assessed value and sale history of the home. (Many county databases now have online access).
The investor subsequently wrote the owners, inquiring if they planned to sell soon or in the near future. He received four interested leads and eventually purchased two of the four homes. Another owner kept the investor's letter, called later that year, and the investor closed on a third home.
In addition, an agent produced two more sellers in the area in the same calendar year, bringing to four the number of homes the investment club accumulated in its targeted neighborhood.
Some agents might argue that if a consumer is going "to work the neighborhood himself," there's no reason for the agent to spend the time and money trying to find a buyer for a house.
I think that's shortsighted. Historically, more sellers would rather sell through an agent than handle the deal themselves. Some folks don't want to deal with a stranger and don't want to go toe-to-toe with the buyer of a property they may have owned all of their adult lives. These people much prefer somebody else to do the work and are willing to pay for it.
According to the National Association of Realtors, about 80 percent of home sellers use real-estate agents. But of the 20 percent who sell their homes without an agent, only 25 percent say they would sell without an agent again.
Saving the trouble and expense of going through an agent should not be a huge incentive for a seller to sell or a buyer to buy. The bigger question is why should consumers involve an agent in the purchase or sale of residential property?
The answer is that some people need all the services a real-estate agent brings, others need a few, while still others require none. The average person does need at least some help because most homeowners are not prepared for the tasks involved. They generally will overprice the place, handle advertising improperly, negotiate poorly and jeopardize a legally binding earnest-money agreement.
I believe that an agent often earns a large portion of the commission by producing an honest, informed selling price for the client. If the house sits on the market, nobody wins and the asking price just artificially inflates the market. Keep in mind that the real-estate agent gets paid only when a deal goes through.
If you choose to contact owners in a specific area with personal notes, do so as only part of your plan. Ask an agent familiar with that area to start looking for you and then talk with people who have friends in that area. If you choose to write up an offer yourself and it's your first time doing so, get professional advice and have the document checked. Then take the purchase and sale agreement to a reputable escrow company so the escrow process can begin. Be prepared to work and solve a variety of problems, until the deal is closed.
Did the three girls and their dad find a house? Not yet.
"It's interesting," the dad said. "A couple of the homes I contacted had for-sale signs on them right after I wrote the note. I think the realtors have worked that area pretty well and told the owners to contact them when they were ready to sell."
Tom in Poulsbo: Tom Kelly will be reading from his novel "Cold Crossover" at 2 p.m. Sunday, June 1, at Liberty Bay Books in Poulsbo. Come hear about real estate agent and former basketball coach Ernie Creekmore as investigates the disappearance of his star player on a late-night ferry.
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