Updated: Mar 12, 2021
First of all, why would you focus on off-market deals?
Well you might be able to negotiate yourself a better price, hell even a genuine B.M.V. discount (below market value). Another positive is there's one less person involved (no agent). The other big plus point is exclusivity if your trading the 'deal' on to an investor.
OK so we know why we might focus on them but how do we get the all elusive direct to vendor leads?
Think about it logically for a second, why would a person who wants to sell their house, not have it on the market? It's an obvious question really... and the truth of it is... they would have it on the market, if they wanted to sell it.
So are direct to vendor leads a myth? In a word no.
In my experience over the years, anybody that I have been - direct to vendor with... they had a real issue with their situation. Those issues are most commonly:
1. The vendor is in negative equity and feels like they cant sell due to owing the bank.
2. The vendor is tired of being on the market and getting no offers, so pulls it from the market, and resigns themselves to staying put.
So for these two reasons alone you can target them very directly with some marketing.
You can create targeted marketing, (online advertising or print media) and really target people in negative equity. All you need is the message to be crystal clear.
If somebody is in negative equity, they will feel like they have no options open to them.
They may be on the verge of bankruptcy or losing the house to the bank
This type of marketing, I'm sure you have seen in your local newspaper, or on bandit boards... the 'We Buy Any House Fast' adverts and the ugly yellow boards, you see strapped to lamp-posts and traffic lights around most towns and cities!
The people that respond to these are super motivated and open to finding a solution to their problem. (I'm really not a fan of bandit boards, myself, I think that approach looks unprofessional.)
There are however, lots of websites and companies now offering a more professional service, buying the homes of distressed vendors who are desperate to sell, but feel a traditional - on the market sale, is just not an option due to being in negative equity, or they need a quick sale to avoid being repossessed.
It's a sad fact that due to the Covid 19 pandemic, many people have lost jobs and will be in this awful position, all through no fault of their own in the next year or so. We are in very strange times and people will be forced into debt.
OK so what do you do with these leads? You try and find a solution for the vendor. Your a problem solver after all and if your vendor has a property problem, then it's your obligation to try and work out a solution. This does not mean, you offer them 30% below the market value in the hope that their desperation means they accept.
Let's not become the low-life opportunists that look to capitalise and benefit from others misfortune. Speak to the vendor, understand their situation, what they owe on the mortgage, how long is left, if they have any other secured debts on the property, and see if there is a way you can help them move on, by applying a strategy that works.
Many people in the UK don't know about the help available to them if they are in debt. People should never feel like the walls are closing in and that they don't have options. People with unmanageable debt should contact the following organisations. Working through the debt issues will feel like a weigh has been lifted and that light at the end of the tunnel will get a little brighter. So direct anybody you know to these sites below.
I'm sure you've heard it before, I'm sure but go and create a win-win scenario and you will be able to sleep at night and be happy with what you did for that vendor. Even if you cannot help with a property sale... point them in the way of some help such as Step Change. You might just save them from losing everything they have in these difficult times.
The key way to attract off-market deals via marketing is to speak to their issues and then tease that you may have a solution or fix for them, it's that simple!
Vendor Tired of No offers On Property, Takes it Off the Market!
You can target these people very simply by monitoring the market, you can even pre-empt it by focusing on properties that have been on the market for more than 6 months and they have been reducing the price in small increments.
This tells you that they don't really want to drop their price, but for some reason they are still not generating offers. It could be in need of a refurbishment, it could be over-priced in the current market. The vendor may need X amount to pay the mortgage and can't drop any further which again means it's just not going to sell on the open market.
You can target these properties directly with a knock on the door, a postcard, a letter... offering to help look at why their house is not selling, do this free of charge. Your intention is always to find a solution. Sometimes vendors need educating on the market and values of properties.
As a former agent, I can't tell you the amount of times a vendor would say it's worth x amount, but that figure makes no sense due to the current market conditions.
The best thing is, when you present them with the cold hard facts and the evidence to back up what your saying... they are much more open to change tack and at least consider dropping the price.
You can find off-market deals in a number of ways, so here are some more avenues to chase down or investigate! But don't be a busy fool, find what works for you and do that, don't be trying to do everything!
Look Online: Facebook Marketplace, Gumtree, any online marketplace
Car Boot Sales: Have a stall with banners etc 'Property Surgery - I can help you'
Networking at property events
Networking at landlord events
Content Marketing Online: constantly offer help and advice online on social platforms
Tell people what you do
Offer referrals: £500 for any successful referral that leads to business.
Broken Chains: people who are desperate to move after their chain breaks
Solicitors: pass on your details to vendors for any failed property sales they were working on.
Builders: do they know people looking to sell, but have not put property on the market yet!
All Trades People: same as above.
Carding: Pop a hand-written card through the door of run-down properties (try to engage in conversation).
Empty Properties: Get owners details off land registry and send letters or knock on neighbours doors to see what information they have about it and or the owner.
There are so many ways to approach off market deals and sourcing in general, you just have to try and see what works for you. Weigh up the cost per lead, and success or quality of those leads and repeat what works and scale up.
I hope you enjoyed this blog, be sure to check out our other blogs for more of the same!