MLS Real Estate Investing – How to Use the MLS for Massive Action
MLS Real Estate (also known as Multiple Listing Service) has been around since the late 1800s, when real estate brokers decided to work in a co-operating agreement in selling properties: basically the concept was “help me sell my inventory, and I will help sell yours.”
Since the public use of computers, the MLS has taken a much broader reach. A lot of information is compiled in each listing, from details about the property, to the owner’s, owner’s agent and selling agent. Also data as DOM (Days On the Market), fluctuations in price, details about purchase (cash or loan,) and other information, can be a gold mine to investors not only wanting to look for properties, but also researching areas for comparable properties, looking for cash buyers, and so much more.
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MLS Real Estate:
How can a real estate investor truly benefit from MLS Real Estate, when he is supposed to look for distressed properties under the radar and preferably get to them before the competition?
Let me share a little background about me and how I used the MLS real estate to really take my wholesaling business to the next level. Back in 1995, I owned several rental properties that I decided to sell, since I was relocating to another state. I sold all my 16 properties in about 2 months – I realized that there was definitely a demand in purchasing good rental properties. So not having much time before relocating and just wanting to take massive action, I decided to turn to the MLS Real Estate and wholesale a few properties similar to the 16 properties I had just sold. I performed a search in 2 zip codes for properties that had been on the market for a certain amount of time, blasted out dozens of contracts at very low offer prices and a few things happened: a good portion got rejected, several were countered and a few accepted! It obviously worked!
The second time around I tweaked the system – I realized that I could get many more accepted if I actually took the time to talk to the listing agent and “educate” him/her on what I was trying to do, how to present the contract to his/her seller and the benefits to him/her to work with someone like me, who was going to send a lot of offers his/her way without even looking at the property. I also tweaked some things on the sale contract to make it easier to accept or counter, I re-worked the counters to increase acceptance and of course I still had several offers accepted from the start. I also figured out how to present the seller and my buyers with a win-win situation (like offering incentive terms,) and bonus to the listing agent for doing a great job.
After a few trials, 20% of my offers were accepted right away, 40% were countered (and I turned a few more of those counters into viable contracts,) and only 40% were rejected, but … I still was able to turn around 25% of those rejected contracts into accepted contracts!
This strategy worked very well for me in finding properties to wholesale for several years and in several states (I moved for a while from the midwest to New York state,) until the internet searches for propeties for sale became a common way for the average home buyer or investor looking for real estate. At that point, some issues came up – now the MLS real estate information could be tapped by anyone (realtor.com, zillow.com) and as a wholesaler it was hard to get around the fact that everyone could access my same information, but not only that, also what the property was on the market for, the listing agent, etc. Determined not to let a good funnel of properties die out for me, I went back to the drawing board and figured out a few things to work (legally and ethically) around the system. And again … it worked!
How many good properties do you think are out there on the MLS with no contracts and ready to expire? Why? I stopped asking myself why long time ago … why could I sell properties at the same price or better for what they had been listed for months in a matter of days? Why wasn’t the owner trying to get a better price for himself? Why wasn’t the agent able to sell the property, but I was? Lack of confidence, lack of marketing, lack of focus, lack of … who knows. But it happens all the time.
In all these years, I have not seen anyone out there (investor or agent) talk about how to use the MLS for massive action in submitting offers for properties that an investor can flip or wholesale! And yes, still with no money or credit, most of the times using only $10 earnest money! That is why I have decided to share this valuable information with investors out there, who would love to submit contracts just by researching the MLS real estate (it is the “low hanging fruit” after all,) and cash in on a massive action strategy.
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