How to find off-market property steals before they go public

How to find off-market property steals before they go public

Timing is everything—in comedy, in romance, and especially in real estate investing.

Investors who have access to the most timely multiple listing service listings have an advantage over those who simply browse Zillow or Redfin for properties. But the real advantage lies with investors who can identify ready-to-sell properties before they ever hit the market.

This strategy, which is usually just called off-market real estate investing, isn’t easy and involves a little bit of luck. The hard work and due diligence can really pay off, though, and lead to some bona fide steals. PropertyReach shares some ways to refine the off-market investing approach.

How to Spot Ready-to-Sell Properties: 6 Key Signs to Watch For

Having boots on the ground is a good way to spot ready-to-sell properties. You can spot renovations, estate sales, landscaping work, and other common signs of home sales.

If you’re forced to use online resources, you can often zero in on “digital clues” that signal an impending sale. Below are six ways to spot off-the-market properties without having to leave your desk.

1. Recent Ownership Changes

A change in property ownership is one of the cleanest, simplest indicators that the house is potentially primed for a transaction. It’s common for divorced couples to place the marital home in a trust for liquidation or for house flippers to transfer ownership to an LLC after they’ve made the repairs they want to make.

2. Recently Withdrawn Listings

Although the U.S. as a whole can largely be described as a seller’s market, it has recently shifted toward the buyer’s side of the pendulum. As a result, listings are staying on the market longer than they have in years. Sellers in metro areas with unambiguous buyer’s markets may become discouraged and take their properties off the market.

While the most common reason for properties disappearing from listings is a successful sale, that isn’t always the case. It’s worth double-checking that a target property actually sold before giving up and moving on to another one.

3. The Property Shows Up in Probate Proceedings

Executors of estates typically opt for selling the decedent’s home if the last will and testament did not specify who, exactly, should receive the home. Because the probate process can take several months (or longer), properties may appear in probate notices or county records before the listing agent can prepare them for the real estate market.

4. The Owner Recently Pulled Building Permits

Another common sign of an impending house sale is a property facelift. The nicer the house looks to prospective buyers, the more they’re generally willing to pay.

What does that mean for real estate investors? Looking for recently filed building and trade permits is a good way to identify premarket properties. City and county online record portals can yield extremely valuable information in this area.

5. Liens Have Recently Been Cleared

Lien activity is yet another signal that a house may find its way onto the market in the near future. Many homeowners want to clear title clouds before listing the house, and they may choose to pay off the smaller liens rather than take a hit to the sale price.

6. Liens Have Recently Been Placed on the Property

The other side of the lien equation is that having a series of liens placed on a property can signal financial distress. Tax liens, HOA liens, and mechanic’s liens are three common legal claims placed on a property when an owner fails to pay creditors.

When these kinds of liens pile up, it’s reasonable to assume the owner is unable to satisfy all their financial obligations. In these cases, owners often end up selling the property to stave off bankruptcy.

You’ve (Potentially) Identified a Ready-to-Sell Property. Now What?

After zeroing in on a property with multiple "owners-are-ready-to-sell" signals, you need to act quickly yet thoughtfully. Below is a rough game plan for finding your needle in a haystack.

1. Contact Your Trusted Real Estate Agent

There’s simply no substitute for an experienced, knowledgeable, and effective real estate agent—especially when you need to act quickly. The agent may know others in the industry, such as contractors and estate planning attorneys, who are also plugged in to presale properties.

2. Send the Current Residents a Letter

A respectful, direct introduction with the current owner is really the only way to reach strangers who might sell in the near future. Keep in mind that many owners in presale situations have just undergone a major life event, such as divorce or the death of a loved one. It’s up to you to strike the right tone and eventually gain their trust.

Tip: The mailing address of the current owner might not match the target property’s address, which itself may indicate that the house is in the preselling stages. Double-check you’re sending the letter to the right people.

3. Keep a Rapport with Relevant Parties

One letter to a stranger, no matter how spectacular it is, will convince a property owner to sell to you. Persistence pays off in these situations. Although follow-ups occasionally backfire on investors, developing a relationship with property owners is absolutely vital.

How to Conduct Your Research Online

AI technology can help gather relevant information, but the biggest part of conducting research for off-market investing is knowing which government records websites to search through.

Some notable examples include:

• County tax assessor’s portals for property tax delinquencies.
• County probate offices for identifying properties attached to recently deceased individuals.
• City permits databases to find recently granted building or renovation permits.
• County clerk websites for notice of lis pendens and other preforeclosure signs.

Another way to access relevant public records is to use online property data search tools that gather the data for you. These can also be useful for providing other useful details, like property owner contact information.

One final place for identifying presale properties is social media groups. Town Facebook pages, for instance, often have posters who discuss in-flux houses or major life events of homeowners. Remember to cross-reference data against other sources and use the information thoughtfully and respectfully.

Leveraging Online Data is Key for Locating Ready-to-Sell Homes

The advantages of finding a ready-to-sell property for off-market investing often outweigh the potential pitfalls. Still, investors like yourself must carefully weigh all the available data before moving forward. Even then, it takes persistence and superb people skills to convince owners to let you in on an exclusive offer.

You won’t hit on every target property. Combining your first-class real estate know-how with a thoughtful approach is the only way to find valuable homes worth adding to your portfolio.

This story was produced by PropertyReach and reviewed and distributed by Stacker.