The Secret to Finding That Off-Market Deal: ‘Be Prepared to Battle’
In the spring of 2020, as people around the globe gave up the usual vices for the observance of Lent — sweets, alcohol, social media — Eric …
In the spring of 2020, as people around the globe gave up the usual vices for the observance of Lent — sweets, alcohol, social media — Eric Atcheson gave up Zillow.
Mr. Atcheson, a pastor, was looking to move his family from Vancouver, Wash., to Birmingham, Ala., for a new job, and had ended up in a black hole of online listings. Every time he found a home that seemed promising, it would vanish into contract within days or even hours of going on the market. His fruitless searches devolved into an obsession.
That’s when his wife, Carrie, an anesthesiologist, stepped in and made him quit Zillow. “She didn’t like what it was turning me into,” said Mr. Atcheson, 35, “and I didn’t like who I was becoming.”
It might have been good for his sanity, but it left with him with another problem: How else was he supposed to find a new home on the other side of the country?
The competitive frenzy of the pandemic housing market has plunged countless home buyers like Mr. Atcheson into despair as they watch once attainable properties appear and disappear on the internet. In 2020, nearly two thirds of Americans who bought a home made an offer on a property that they hadn’t even seen in person, according to data from Redfin. By June 2021, the number of homes for sale was down 28 percent year over year.
“If you’re a buyer, you have to be prepared to battle,” said Dana Ash-McGinty, a Realtor in the Washington, D.C., area. In her 20-year career, Ms. Ash-McGinty said, she had never encouraged buyers to make up a gap in a home’s value appraisal, until last year. “You’ve got to come to play.”
The problem is that the rules of the game are changing, with the usual tools for searching and viewing new listings proving less and less effective.
“We have witnessed all sorts of desperate acts to get a deal over the hump,” said the New York-based luxury broker Cody Vichinsky of Bespoke Real Estate. He recalled one buyer showing up unannounced at a seller’s workplace. Another buyer discovered the identity of a rival bidder and told that person that he was pulling out of the bidding war, only to come back with a bigger offer to seal the deal.
For many buyers, sheer speed wins the day. After months of offering bonuses and escalation clauses and still losing out, the Atchesons knew they had to move fast. On a scouting trip to Birmingham, they saw a home on the local MLS, visited the same day, and made an offer that weekend.
“Simply saying we were a nice family and not a cash buyer wasn’t helping us against cash buyers,” Mr. Atcheson said. “We would not have survived in this market as first-time home buyers, and we still almost didn’t.”
The tougher deal was the one on a Birmingham house for Mrs. Atcheson’s parents, who help care for the couple’s young daughter. To move faster, they opened up the search to estate sales, which come with probate courts and, often, costly renovations. Working with a local broker, they found a house via an estate sale in April 2020 and closed that Memorial Day weekend. They loved that the house was in a safe area and was close to their own home, but it wasn’t easy, involving “layers of bureaucracy” with lawyers and executors. And it needs a new roof. “That’s our tax refund this year,” Mr. Atcheson said.
Lauren Glass Luebker, 40, searched for a year in Cedar Park, Texas, a suburb of Austin, before settling on a house that she and her husband, Jason, didn’t love. Itching to move again, they sent letters to homeowners in the two neighborhoods they were interested inand “posted on every Facebook group imaginable.” As the market in the Austin area heated up, more homes drifted out of their price range.
“I finally got a bite on our neighborhood Facebook group,” Ms. Luebker said. When a local homeowner mentionedshe was ready to sell, the Luebkers made an offer and closed before it went on the market. Both parties used a broker, and the purchase was contingent on the Luebkers selling their own home. She said the seller was “more than accommodating and patient,” as their home sale went through ups and downs and almost fell through.
“Honestly we feel so lucky to have gotten our house for the price we did,” she said.
If the neighborhood Facebook page isn’t working and the postcards aren’t attracting eager sellers, good old-fashioned word of mouth is worth a try. Nearly a decade ago, when Julie and Craig Letowski, both 35, were looking to leave Boston, they searched all over New England and eventually fell in love with a house in Washington, Maine. It obviously needed a lot of work. Also, it wasn’t for sale. So they bought another home about 15 minutes away, and for the next five years Ms. Letowski regularly drove out of her way to check up on that house. In the meantime, close friends of the couple started doing some caretaking for the owner, and five years later, as the Letowskis were looking for more space for the foster baby they were preparing to bring home, they asked again about the long-shot dream home.
The owner, Michelle Henkin, had previously had “a very unsatisfying experience working through a Realtor and being kept at arm’s length from the buyer,” she said, and had pulled the house off the market. When Ms. Hankin heard through her friend that the Letowkis had always loved her house, she opened her mind to selling.
She agreed to do a walk-through with Ms. Letowski and an official from the Department of Health and Human Services, to make sure it was suitable for the baby. “We met at the house, and almost immediately got to work figuring out how to make it work for all involved,” she said.
They didn’t use brokers, and Ms. Hankin’s lawyer drew up a contract and helped carve out the terms of the deal. “We made it happen through a really beautiful new friendship that defied the normal timelines and practices of real estate,” Ms. Letowski said.
Then, of course, there is Instagram, where intrepid buyers sift through infinite photos of renovated barns and converted churches, trying not to get too starry-eyed. Last year, Kelsey Kemp started scrolling through the Instagram feeds of various architects and designers. She and her husband, Matthew Bruehl, had been renting outside Raleigh-Durham, N.C., and feared getting stuck in that cycle of “putting in bid after bid.”
Wake Forest, about 90 minutes away, wasn’t on their radar, until the day Ms. Kemp, 35, spotted an 1892 Queen Anne Victorian on the Captivating Houses feed.
“I texted my husband and said, ‘I know we probably won’t get it, but wouldn’t it be fun to look,’” Ms. Kemp said. She called her broker and told her they were just going to check out the house on their own, out of curiosity, and not to expect anything to come of it. They fell in love with its huge porch, octagonal rooms and attic turret, and ended up making an offer in December. They closed in March.
Ms. Kemp called the transaction “serendipitous,” and also “random.”
They did use a broker, but they avoided the usual trauma of bidding wars and painful concessions. What they did not avoid was repairs. “Our inspection report was 68 pages long,” Ms. Kemp said. The fact that their student loans were paused during the pandemic made them feel comfortable putting some money into fixes.
“Younger buyers get tapped into social media and think that something they buy should look like an Insta feed within a month,” said Elizabeth Finkelstein, who runs the hugely popular Instagram account (and soon-to-be HGTV show) Cheap Old Houses with her husband, Ethan Finkelstein. “Don’t be afraid to take your time and make it what you want.”
In other words, accept the fact that your house might require an open mind, to say nothing of how you found it. The learning curve is steep for everyone these days, brokers included, said the Kemps’ agent, Ann-Cabell Baum.
When Ms. Kemp showed her the house, Ms. Baum did some “behind the scenes legwork” to locate the agent who had listed the home during the previous sale. “I had a conversation with her and asked if the sellers would still be open to potentially selling,” she said. “It’s a ton of work, but when you end with a happy buyer and a happy seller, it’s music to our ears.”
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