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If you want a chance at convincing the homeowner to sell, make a convincing offer and avoid insulting the seller. (Getty Images)

Residential real estate has largely followed the same narrative for the past few years: While there are plenty of buyers shopping around and ready to make a bid, there simply aren’t enough homes on the market.

There are more than 75 million owner-occupied households in the U.S., according to the U.S. Census Bureau. Despite that large number, just a fraction accounts for the homes that go on the market. The National Association of Realtors reports that while the total number of home sales increased in 2017 compared with the previous two years, the amount of inventory decreased – 1.46 million homes were on the market last December, nearly 200,000 fewer homes than in December 2016. The lower number leaves just 3.9 months of inventory, per NAR, while six months of inventory is considered a balanced market.

With numbers like these, it’s no wonder buyers find themselves putting off their hunt for a home in hopes of saving up more or waiting for more houses to be listed. David Marc Harris, founder of the off-market home sales tool Remzy, says the entire process has a bit of a butterfly effect.

“The agent loses an opportunity, the buyer doesn’t get to buy anything and basically what you’re having is the whole real estate economy is starting to slow down,” he says.

[Read: What to Expect From the Housing Market in 2018.]

If you’re a buyer who’s made more than one offer, only to be outbid by other house hunters, there’s no need to feel discouraged. You may simply need to explore your options. One of those, of course, is pursuing houses that aren’t currently available for buyers.

It may seem counterintuitive to offer to buy a home the owner isn’t trying to sell, but in tight real estate markets, agents can find a lot of success for buyer clients by reaching out with an unsolicited offer.

Homeowners may throw out the letter they receive, call an agent to represent them or be willing to entertain a for-sale-by-owner deal, but by taking the chance, you’ve managed to open more doors in your search for your next home.

Remzy provides a searchable database of all properties (not just those on the market) and facilitates the letter delivery to property owners for off-market properties, allowing buyers and agents to write the content. Harris says the platform’s first year in business has shown promising results, with a 40 percent response rate during the peak homebuying season last summer.

If you’re ready to explore this unconventional house-hunting strategy, here are four things to keep in mind.

Don’t go it alone. It may sound like a great idea to cut out even more middlemen by approaching an owner without a real estate agent, but you run the risk of coming up against more obstacles if you don't have a professional involved in a deal, or the homeowner may not take you seriously as you try to wade through a purchase without professional help.

“There are so many things that can go wrong in the closing process,” Harris says.

Ensure you select an agent who's willing to take those extra steps to help you successfully purchase a home, especially if you’re a first-time buyer and you live in a hot market.

[See: 8 Things You Can Learn From a First-Time Homebuyer Boot Camp.]

Creig Northrop, a real estate agent and president of the Creig Northrop Team of Long & Foster Real Estate Inc. in Clarksville, Maryland, says the agents on his team have to be willing to go beyond the local multiple listing service when their client can’t find a house they like or can’t find one that will accept their offer. “It’s really being a proactive agent. … It doesn’t just stop at, ‘Hey, I can’t find you anything,’” he says.

On the opposite side, of course, expect a seller to consider bringing his or her own agent representation into the deal. With representation, the seller may want to test the market before accepting your bid, which would both delay your purchase process and potentially leave you in the midst of an unwanted bidding war. But this also means the seller would have to go through the process of preparing the property for public viewing, a step the off-market deal would avoid.

Look for properties with owners who are more likely to consider an offer. Offering to buy a house that sold in the last couple of years likely isn’t going to get much interest from an owner who’s enjoying the space. You are most likely to receive interest from homeowners who previously listed their home with an agent but took it off market before it sold.

Of course, if you live in a market with low inventory, the number of houses that are taken off market without selling are few and far between – and may not be what you want anyway. Harris recommends taking a close look at properties with absentee owners who rent out the property to tenants, which you might see in listings online for rentals or Airbnb, with "For Rent" signs out front or simply hear about through conversations with people who live in the neighborhood. Owners currently using the home as an investment are more likely to consider an offer to purchase than someone still placing sentimental value on the property.

“Every single Airbnb rental, in my opinion, could be a potential letter to that homeowner,” Harris says.



Make a realistic offer. Even though the homeowner hasn’t run reports on the recent comparable home sales in the neighborhood, you still need to avoid insulting the potential seller with your offer. In fact, your offer has to include price and conditions that entice the homeowner to sell to you – rather than putting the home on the market.

“It has to be realistic in value,” Northrop says. “Why would the seller sell it, if they’re not on the market, for anything less than what it’s worth?”

[Read: Why You Need an Extra $2,500 on Hand Once You've Bought a House.]

Write a good letter. With that realistic purchase price, keep in mind that you have to write a compelling letter – not just to ensure the owner that you’re not a scam, but also to show them the deal will be worth it in the long run.

“Every offer that you submit, whether you go it alone or you use an agent, … you have to compose a plea to the homeowner of why you would be the right fit for a home,” Harris says. He also advises against trying to approach a homeowner in person first since people tend to view strangers knocking on their door warily, plus some cities have even made it illegal for agents to go door to door for business purposes.

Many homebuyers bidding on listed properties now write letters that include information about why the house is a good fit for them. If you’re able to evoke emotion in a homeowner as well, while making it clear that selling is equally beneficial for him or her, you’re more likely to see that letter turn into a transaction.


8 Potential Headaches to Be Aware of Before Becoming a Homeowner

Be ready for things to go wrong.

The facia board is rotted and the gutters a re falling away from the house.  Look for other images in this series.

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No one loves shelling out money for unexpected expenses, but sometimes that seems like a rite of passage in homeownership. “Most of the time, the unhappy surprises are simply due to people being unaware of the things that can crop up,” says Brad Hunter, chief economist for HomeAdvisor. First-time homebuyers in particular may not know what to expect after closing on a home, and there’s nothing worse than developing buyer’s remorse about one of the largest investments you’ll ever make. Here are eight headaches to prepare for if you’re looking to purchase a house.

A suddenly less-than-desirable location

A suddenly less-than-desirable location

Aerial View of school buildings and a track Central Texas near Austin

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Buying a house across the street from a high school didn’t seem like such a bad idea when you saw how nicely renovated it was. But when you don’t have kids and Friday night football games are keeping you up later than you would like, you realize you should have made a pros-and-cons list regarding the location. Don’t let a charming interior override a location you dislike or a lot that will give you flooding problems. “If you don’t like your lot, don’t buy the house, because you cannot change that,” says Kim Wirtz, a Realtor for Century 21 Affiliated in Lockport, Illinois.

A high monthly mortgage payment

A high monthly mortgage payment

House keys over the hundred dollar banknotes against wooden background

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One of the most crippling headaches to deal with is a monthly mortgage payment you find you can’t quite afford. Lysette Portales, a real estate agent with Century 21 Jim White & Associates in Treasure Island, Florida, says she stresses to clients that they should shop around for a mortgage with multiple lenders and inquire with each about different program options. “A lot of them might be able to do 100 percent [financing],” she says, noting that many homebuyers typically only know about a couple mortgage programs and settle for one without considering what would be most affordable option both now and down the line.

Items that are on their last legs

Items that are on their last legs

A man uses a flashlight to help him see the hot water heater in a dark closet

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Whether it's the roof, water heater or furnace, aging home systems will need replacement. And that may end up being sooner than you’d like, especially if you didn’t pay close attention to the age and condition of the roof, plumbing, electric and heating and cooling systems when your inspector pointed them out. HomeAdvisor’s 2015 New Homeowner Survey found that 75 percent of homeowners face an unexpected emergency within a year of purchase. To expect the unexpected, Hunter points to the survey’s recommendation that homeowners plan to spend 1 percent of the home’s purchase price on unplanned repairs. Maintaining at least that much in your emergency fund will help keep you from dipping into other savings from year to year.

Old systems

Old systems

An old air conditioner unit, in need of updating, sitting in tall weeds

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It’s important to pay attention to a home's aging big-ticket items before you even make an offer. “A lot of homebuyers are distracted by how cute a home can be,” Portales says, adding that she makes it her job to point out the age of the roof, air conditioning unit, water heater and more to buyers. Then when it comes time to calculate an offer, you should factor in the cost of those pieces that will need immediate replacement when determining how much you think the home is worth.

An air conditioner that's not the same

An air conditioner that's not the same

During hot summer night with air conditioning system breakdown trying to find a way to sleep in the refrigerator. Very dark atmosphere. Picture fades to black on left.

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Wirtz says one of the things in a home that seems to always break or have issues within the first year of its purchase is the air conditioner. But it’s not always because it breaks down – she says it simply might not be as effective as the new homeowner wants it to be. “It may not be cooling like they’re used to,” Wirtz says. You can either learn to deal with a little less cooling, bring in an HVAC pro to inspect and fix any problems or research any DIY fixes that might get it cooling better – like air conditioner cleaning spray.

Unseen leaks

Unseen leaks

An old pipe breaks in freezing weather in Baku, Azerbaijan

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Home inspectors aren’t able to see through walls, so the discovery of a pipe leak isn’t uncommon after you’ve moved into the home. But this is one repair you want to make as quickly as possible. “When there’s water that is not stopped, it can create mold – and mold remediation is extremely expensive and extremely difficult,” Hunter says. Mold growth in your home can cause serious health problems, so it’s imperative to address any moisture issues as quickly as possible to avoid it becoming any more dangerous, let alone more expensive.

Surprise renovation expenses

Surprise renovation expenses

Contractor discussing renovations

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Fixer-uppers are all the rage these days, as many homebuyers are willing to take on renovation projects in exchange for a slightly lower price tag. But when budgeting for your renovations, leave plenty of room for the discovery of existing problems once your contractor looks behind the walls. The HomeAdvisor survey found 51 percent of homeowners spent more time on home projects than they expected. “Even if you have a fully vetted, well-reviewed contractor … they still might uncover issues that maybe a previous contractor left incomplete,” Hunter says. He recommends leaving around 10 percent extra space in your budget for surprise problems of any kind.

Problems that pile up

Problems that pile up

Mold grows on a wall next to a damp stained wood door.

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All too often it feels like the problems in a home have a snowballing effect, but you don’t have to go broke tackling them all at once. “Day one, [homeowners] won’t have to tackle all those projects,” Hunter says. “They can use the list of items found by the home inspector as a checklist and prioritize the items on that list and create a budget.” You should immediately address those problems that create a health or safety issue, such as a broken step or leak in your roof that could lead to mold. But replacing an older dishwasher can wait until next year, when you have more room in your home repair budget.

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Tags: real estate, housing market, home prices, existing home sales, pending home sales


Devon Thorsby is the Real Estate editor at U.S. News. Since joining the Consumer Advice team in 2015, she has focused on breaking down the homebuying and selling process, as well as reporting on trends in the real estate industry and their effect on the public. Thorsby previously worked in research and communications for commercial real estate information company CoStar Group, and received her bachelor’s degree from the University of Michigan, where she worked for the student-run newspaper, The Michigan Daily. You can follow her on Twitter, connect with her on LinkedIn or email her at dthorsby@usnews.com.