Real Estate Insider Secrets: How Long Has the House Been on the Market Matters!

00:00:00.000 | So how does how long the house has been on the market play into this?

00:00:03.040 | When you see something that's been on for a while, or we'll get to something that just

00:00:07.940 | came on after?

00:00:08.940 | Hey, I mean, it's just like online dating, right?

00:00:10.960 | I don't do online dating, but I know how the thing works.

00:00:13.780 | If she's been single for 6 days, she's probably not in a rush to take your response to go

00:00:18.660 | out with you Friday.

00:00:19.660 | But if she's been single for 6 months, she's probably going to give you a little bit more

00:00:22.680 | attention when you send that message.

00:00:24.580 | When a seller first puts their house on the market, they have all the leverage.

00:00:28.700 | They have tons of interest, people are going to look at their home showings are being scheduled.

00:00:33.340 | Agents are calling all excited.

00:00:34.440 | We really love the house.

00:00:35.440 | Do you have any other offers?

00:00:36.440 | It's this frenetic, crazy emotional pace where the sellers are trying to think of how can

00:00:40.980 | I leverage this to get as much money as possible, which is really where I'm trying to guide

00:00:44.540 | my clients away.

00:00:45.540 | I don't want you in that feeding frenzy.

00:00:47.500 | If no one buys that house after 14 to 21 days, interest is starting to slow by day 30, day

00:00:53.900 | 40.

00:00:54.900 | They're getting worried.

00:00:56.180 | It's not who's the best guy that I can take that gets to take me to prom.

00:00:59.960 | It's am I going to prom at all?

00:01:01.740 | I just want a date.

00:01:02.740 | Does anyone want to buy my house?

00:01:04.060 | I'm stuck.

00:01:05.060 | I might not be able to move.

00:01:06.060 | And I write about this in some of the books that I've published for BiggerPockets for

00:01:09.060 | agents.

00:01:10.060 | There's this spectrum of fear and greed.

00:01:11.980 | We usually all start off on the greed side.

00:01:14.540 | And as you slide across, you end up in the fear side.

00:01:17.700 | You're worried, "I might not sell the house at all."

00:01:19.900 | So in most markets, depending on what your average day is on market, this wouldn't apply

00:01:23.980 | in an area with $7 million homes that tend to sit on the market for 6 months before they

00:01:28.820 | sell.

00:01:29.820 | But for your regular starter homes, they should be selling in less than 30 days in most markets

00:01:33.420 | in the country.

00:01:34.420 | So the minute you get past that point, you're going to start seeing some worry in sellers

00:01:38.340 | and they will be open to more aggressive offers or terms that are more favorable to the buyer.

00:01:43.660 | What happens if you are in a hot market?

00:01:45.460 | And let's say you've identified a neighborhood, you've looked, maybe a house comes on every

00:01:50.320 | 2 or 3 months, and you know, "This is what I want."

00:01:53.940 | You say, "The moment that house comes on the market, it's hot.

00:01:56.980 | It's the worst time."

00:01:58.660 | Is there a way to get ahead of that?

00:01:59.780 | Is there a way to find homes before they get on the market and buy them?

00:02:02.900 | Is that finding the right agent?

00:02:04.500 | Or how do you get what might be a hot home before it's hot?

00:02:08.900 | Rob, what have you been doing?

00:02:10.220 | You've gotten a couple of deals this way.

00:02:11.940 | Yeah.

00:02:12.940 | So there are definitely a few.

00:02:13.940 | I mean, there's...

00:02:14.940 | Let's see.

00:02:16.220 | There's the creative finance and the sub 2 deal.

00:02:18.500 | And that's effectively where you're cold calling a bunch of property owners and also wholesaling

00:02:23.220 | where you cold call property owners and basically try to buy the property directly from them

00:02:28.720 | versus going the realtor route.

00:02:30.940 | That's a very popular niche within real estate.

00:02:33.180 | But honestly, I think having a really big network of realtors that you're friendly with

00:02:38.020 | is super important.

00:02:39.260 | And more than just having a bunch of realtors in your network, finding a realtor that I

00:02:44.500 | see...

00:02:45.500 | And this is where the marketing thing comes into play too.

00:02:48.260 | So finding a realtor that's very good at marketing and having a vast network of realtor friends

00:02:54.360 | that can pass each other deals to you or pass deals to each other, that to me is super important.

00:03:00.100 | Because if you find someone that's very new and very green in the industry, they probably

00:03:04.420 | don't have a lot of other real estate colleagues necessarily.

00:03:07.860 | But if it's someone that's been working in the industry for a while, they have the opportunity

00:03:11.420 | to find all these deals before they ever hit the market.

00:03:13.660 | So I have realtors that are texting me all the time that they're like, "Hey, my bud just

00:03:17.020 | sent me this.

00:03:18.020 | It's gonna hit the market next week.

00:03:19.900 | They're interested in selling it before even going to market.

00:03:22.220 | Are you interested?"

00:03:23.420 | And I'll look at a deal much quicker, much faster, and much more intentionally knowing

00:03:27.080 | that I've got first dibs on it.

00:03:28.940 | Do you think that applies for a consumer?

00:03:32.020 | Should I...

00:03:33.020 | If I'm looking to buy a home in a neighborhood, should I just talk to all the agents in the

00:03:36.380 | neighborhood and say, "Hey, I'm looking to buy a home.

00:03:38.140 | There's nothing on the market I want right now.

00:03:40.160 | But I just want you to know, if you can find me something, I'm ready to go."

00:03:43.580 | And just talk to 10 agents.

00:03:45.420 | Do agents like that kind of behavior or...?

00:03:47.900 | Not really.

00:03:48.900 | Yeah.

00:03:49.900 | No, not really.

00:03:50.900 | Because you send the message that you're looking for an open relationship and they're wanting

00:03:55.620 | a committed relationship.

00:03:57.100 | So it doesn't benefit me as an agent if you come and you're talking to 12 agents in the

00:04:01.540 | years.

00:04:02.540 | If you find me the deal, I'll buy it from you.

00:04:04.340 | That sounds great, but I don't need to sell it to you.

00:04:06.420 | If I get a listing, it's so hot right now, everyone's going to want to buy it.

00:04:10.740 | I don't have to discount my commission.

00:04:12.580 | There's people that would probably give me extra commission if they wanted to get that

00:04:15.460 | home or I want to be able to go to my seller and tell them I got 10 offers on their home

00:04:19.220 | and I want to look like a rock star to them.

00:04:20.980 | So I don't think the "go wide instead of deep" strategy works unless it's a buyer's market.

00:04:27.440 | When you are in those situations where it's very difficult to find someone to buy a home

00:04:31.620 | --we're talking 2010 when there were for sale signs everywhere.

00:04:35.180 | Listings were all over the place.

00:04:36.180 | REO inventory was massive, but there weren't a lot of pre-approved buyers that were willing

00:04:40.220 | to step in and buy a house.

00:04:41.940 | Then that strategy makes a lot more sense.

00:04:43.740 | That's where you're reaching out to all these agents saying, "Hey, if you get a deal, bring

00:04:47.460 | it to me and I'll buy it because you're the prize in that situation."

00:04:50.540 | They need a buyer.

00:04:51.980 | And you're basically saying, "Listen, I'm one of the few buyers that's out there that

00:04:54.820 | could do this thing.

00:04:55.820 | But if you want my business, you're going to have to make it worth my while."

00:04:59.260 | That works a lot better than in a market like today, where you're just one out of a whole

00:05:03.540 | bunch of other people that are all struggling to try to get a house.

00:05:06.500 | Yeah.

00:05:07.500 | I'm actually really glad you asked that, Chris.

00:05:08.500 | I'm glad you clarified, David, because Chris, for reference, I'm in about 16 different markets

00:05:13.140 | around the country.

00:05:14.140 | So I actually have a massive network of realtors in different cities.

00:05:18.700 | They're all very aware of exactly what I'm looking for.

00:05:21.140 | So when they get a pocket listing or an off-market listing, they text me directly.

00:05:25.260 | When I'm working in a city, specifically, or in a market specifically, I do want just

00:05:29.300 | one realtor.

00:05:30.300 | And that's why I say, "I want to find a realtor that's got a lot of realtor friends that can

00:05:33.980 | help find some of those off-market deals."

00:05:35.860 | So it's about finding someone that's connected.

00:05:37.780 | Is that as simple as just seeing whose name pops up in a neighborhood most for sale signs?

00:05:42.700 | Who represented most of the sales or any other tactics for finding that super connected agent?

00:05:48.140 | I see why it would look that way.

00:05:50.880 | But there are so many real estate agents, Chris.

00:05:54.060 | It's like the ones you see are the tip of the iceberg.

00:05:57.020 | There's so many of them.

00:05:58.140 | There's way too many agents.

00:05:59.340 | We don't need this many.

00:06:00.620 | It reminds me of a scene in The Office where Dwight and Michael are walking through a crowded

00:06:03.860 | room and Dwight says, "There's too many people.

00:06:05.980 | We need another plague."

00:06:06.980 | There's just so many agents that have flooded into the real estate space.

00:06:10.500 | Like people coming to California in 1849 thinking they're going to strike gold.

00:06:14.700 | They're all fighting to try to get that seller to think of them.

00:06:18.580 | It's just this massive marketing campaign that every agent is throwing themselves in

00:06:22.860 | front of people.

00:06:24.420 | And now you've got investors that are also sending letters to those same people saying,

00:06:28.420 | "I want to buy your house.

00:06:29.420 | I want to buy your house."

00:06:30.860 | Most home sellers know, in general, they have what everyone wants.

00:06:36.460 | Their home is valuable.

00:06:38.420 | You're probably not going to put things in your favor by just talking to every real estate

00:06:41.940 | agent out there and saying, "Hey, I want to buy a house if you get one."

00:06:45.100 | Because if they can get a listing, it's guaranteed to sell.

00:06:47.020 | There's no reason they're going to go to you particularly.

00:06:51.140 | And then this is a very short question, but it's important.

00:06:54.180 | How much does the brand behind the agent matter?

00:06:56.620 | Is it all about the agent or is it all about the agency they work at or the brokerage firm

00:07:01.620 | they work at?

00:07:02.620 | The only people that think a broker matters is the broker.

00:07:05.580 | Your clients never care who your broker is.

00:07:07.740 | It's 100% the agent.

00:07:09.120 | So if you're trying to find someone and they're like, "Oh, you can work with my colleague

00:07:11.860 | on this."

00:07:12.860 | That's a red flag.

00:07:13.860 | It used to be really useful.

00:07:16.060 | Just a little history lesson.

00:07:17.520 | Because there was a time where if you wanted to buy a house that Remax was listing, you

00:07:22.860 | had to go to a Remax agent at that office to buy that house.

00:07:26.840 | So Remax had their listings, Coldwell Banker had theirs, Century 21 had theirs.

00:07:31.220 | And you would jump from broker to broker and look at their inventory.

00:07:34.900 | When we created the multiple listing service, this was an agreement between all brokerages

00:07:38.220 | that they would all put their listings into one central location that everybody could

00:07:42.060 | see which eventually morphed into the online listing portals that we all see when we're

00:07:45.820 | looking for homes.

00:07:47.140 | That eliminated the value of going to an individual broker because now you can see everybody's

00:07:51.140 | inventory in the same place.

00:07:53.140 | And if people that you know had success using those online brokers that are like, "We're

00:07:57.540 | just going to cut your rate and give you huge discounts."

00:07:59.780 | I know Redfin does that.

00:08:03.460 | Have you heard success stories there?

00:08:04.860 | Is the savings worth it?

00:08:06.060 | In our industry, Chris, I'm just going to tell you the brutal truth.

00:08:10.780 | I look for a Redfin agent to be on the other side of the transaction because I know I'm

00:08:15.300 | going to destroy him in negotiation.

00:08:20.460 | Because they don't make hardly any money on these deals.

00:08:22.460 | They usually go there when they're desperate for food.

00:08:24.980 | "I'm starving.

00:08:26.580 | Please Redfin, give me some deals," or whatever the discount brokerage is.

00:08:30.140 | I've had massive success, particularly targeting listings that are Redfin listings because

00:08:35.140 | those Redfin agents are...

00:08:37.540 | Not all the time.

00:08:38.540 | I'm sure there's going to be a Redfin agent out there who's going to say, "Well, I'm a

00:08:40.540 | Redfin agent.

00:08:41.540 | I'm good."

00:08:42.540 | Yes, they do exist.

00:08:43.540 | But in general, any of those discount brokerages...

00:08:44.540 | I sell the most Redfin homes in this neighborhood.

00:08:48.020 | (laughs)

00:08:49.020 | Yeah.

00:08:50.020 | In fact, that might even be an advantage to tell people to look for those because your

00:08:54.740 | agent is going to have a field day with their agent if you have a good one.

00:08:58.940 | Yeah.

00:08:59.940 | One more tip.

00:09:00.940 | I got one more tip here.

00:09:01.940 | If the listing says, "Run, don't walk," it's probably not that great of a listing.

00:09:07.820 | (laughs)

00:09:08.820 | Oh, wow.

00:09:09.820 | We were just talking about this yesterday.

00:09:10.820 | Every listing agent is putting their house boast of 5 bedrooms, boast of amazing light,

00:09:16.300 | boast of a great view.

00:09:17.500 | These houses are just boasting all over the place.

00:09:19.420 | Bay Area real estate has become very arrogant.

00:09:21.900 | (laughs)

Real Estate Insider Secrets: How Long Has the House Been on the Market Matters!

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