Want to know what I think is a terrible idea for MLS listings?
Lowballing every deal you see.
As far as I’m concerned, it’s a really bad strategy.
Could you get a deal by doing that? Sure. But you're going to end up wasting a lot of people's time—both yours and the agents and the sellers—and you're going to annoy a LOT of people. Then your reputation and credibility suffer.
So, I want to explain what I look for on the MLS to figure out which properties I make offers on.
Mucho Motivation
Just like with any property you’re looking to wholesale, I’m searching for motivation.
If I don’t see some type of motivation, I'm not going to make an offer.
So, I check out some MLS listings on Zillow to get lots of helpful info.
The #1 thing that I look for that tells me if the seller might be motivated is this: The list price is already below market value.
If there's a property on the market and it’s listed at full list price based on comps in the area, I'm not going to bother with it. I move on. I only work with properties that are priced below market value.
Pro Tip: I suggest you avoid high-end luxury areas and war zones. You can do deals in those areas, but it’s definitely harder. I’ve found that the sweet spot where most of the wholesaling activity going on is in the blue-collar, bread-and-butter type of neighborhood.
Okay, here are several other factors that I look for… factors that signal to me there’s motivation, in addition to the property being priced below market value:
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vacant properties
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it needs work/repairs/updating
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it’s been on the market for several months
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it’s had price drops
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properties that have been put under contract and then come back on the market
If I see all of those characteristics, I’d definitely make an offer, because all of those things can lead to motivation. That’s the perfect wholesaling scenario for me.
Usually you won’t see every one of those characteristics, but even just one or two means it's worth looking into it and likely making an offer.
Iowa Example Property
So, check out the screenshot below from a search I did. A student was actually asking me about my MLS strategy, so I’m searching in her area of Iowa…
You can see that most of the properties in her target area are listed at more than $100,000. There’s $144k, $157k, $129k… and then I see one for just $75,000. That’s immediately where my eyes are drawn, so I'd click on that one.
Once I’ve clicked on that listing, a new page for that property opens and I scroll down and click on the dropdown of the price history to get helpful details. You can learn a LOT of great information here.
What I discovered is that it had been on the market for a while.
It was originally listed for $89,900, and then it was pending, which means it was put under contract. But just a month later it came back on the market. Then two months later there was a $10,000 price drop. Another month later it went back under contract but came back on the market with yet another price change…
So all of this tells me that this is definitely a property that I would be interested in making an offer on.
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It's priced well below market value already.
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It's been on the market for several months.
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It’s had price drops.
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It's gone under contract and come back on the market a couple of times.
And why is that important?
Well, because this process can be very stressful for sellers—they get an offer on their property, they think they're going to be done with it and get their cash and move on... then the contract falls through—twice—for whatever reason. And they've dropped the price...
All of that that spells motivation to me.
Plus, I looked through the pictures and it’s pretty clear that the house needs some updating.
An Appropriate Offer
So, this is a great example of a property I’d make an offer on.
But, how much would I offer?
For that, I'd have to do some more research—but I’ll give you the high level of my thought process…
Of course, I’d check out comps in the area—what the cash investors are paying for similar properties. And then I’d have to factor in what repairs are needed… based on those numbers, I’d be able to make an offer.
On this specific example property—with of all the motivation I see—I’d have no problem offering $20,000-$30,000 below market value because I have a reason to… motivated seller, priced low, needs work, on the market for a while, price drops.
So, I’d just contact the listing agent. I always make my offers directly through the listing agent. Their contact info is on the Zillow page. I call the Realtor and tell them I'm an investor and I'm interested in making an offer that’s below list price.
Be upfront and honest, so you don’t waste anyone’s time and resources.
Talking with the agent directly is also a great way to get more information on the property. A lot of times, you can find out more details about the repairs needed...
Or, they may tell you straight out not to bother with a lower offer… saying, for example, they just got a cash offer for $5k below list price and they didn't take it because the seller owed too much on the property.
Bottom Line
Again, I don’t recommend lowballing every single property on the MLS—you're going to make a lot of agents mad and get a bad reputation for yourself very quickly.
Instead, go through the listings, take your time and look for motivation.
That has always been my strategy and it's worked well for me.
It could work for you too, so I encourage you to give it a go.
I’m Listening…
How do you wholesale on the MLS? Tell us your hacks in the comments section below.
Don’t go out and lowball every offer on the MLS—it’s bad business.
Look for motivation on MLS listing like price drops and time on the market.
Analyze comps and repairs before submitting your offer.
Call up the listing agent directly to make your offer.
Steph Davis
started wholesaling in October of 2006. At the time, she had been stuck at a job bartending for the past 10+ years. She was broke and miserable, and desperately wanted out of the bar scene, which I had been stuck in for the last 10+ years.
She ended up closing four wholesale deals by the end of 2006.
Since then, she's closed more deals than she can count, has written two best selling wholesaling courses (Flip This REO and The Cash Buyer Ninja) and continues to teach others how to wholesale with videos, interviews, and as much useful information as she possibly can, because she knows what it’s like to be a broke beginner, struggling to get that first deal.