By now, it's pretty obvious to anyone that Boston's real estate industry is on the uptick. In fact, you can literally hear the market come roaring back - if only in the form of cranes and machinery digging and constructing new developments throughout Downtown and Metropolitan Boston. Nowadays, no one would dare argue with you if you said you're interested in investing in a property in the city, since market outlook is at its best. Conversely, no one would convince you otherwise if you've decided to sell your piece of Bostonian real estate, as it will fetch a hefty return on your investment. This is because Boston, apart from being named one of the top cities in the country where you should invest your hard-earned money in, is also in the unique position of transitioning from a buyer's market into a seller's sanctuary.
One factor that's fueling this rapid change is the shortage of available properties currently listed in the market. Inventories are dwindling as you read this article, and are in fact only good for the next four and a half months, if the current sales pace hold. Home seekers then, are left facing a huge inventory shortage with no clear end in sight, as developers rush to respond to the market's demand. Some buyers make three of four offers on homes, only to keep losing out to other willing bidders. In this tight market, buyers and real estate agents need to think outside the box. You may need to go after homes that aren't listed for sale. Here are five ways to do that:
1. Look for 'expired' and 'withdrawn' listings
Ask your agent to look at past listings for you - a good one will scour the MLS for homes that were listed in the recent months but was never sold. Many homes failed to sell because they were seen as overpriced at the time. Does their last list price seem like a valid price today? Chances are, the owner doesn't realize how much the market has picked up and might still be open to selling the home. If they are in the know, then play the game with them and level the playing field with the fact that it's been months since they've listed their home. Either way, first have your agent contact the owner with a letter expressing your interest in purchasing the property. Be sure to show the owner that you're serious and in a rush. This trick is sure to get you a response.
2. Search for "aspirationally-priced" properties
Do you know that annoying feeling you get when you're on the T during rush hour, with a Sox game getting out, and a Celtics one just about to begin? Well, that tight, claustrophobic feeling is what you get when you search for properties now a days. No one is going to blame you if you just don't even want to start it. BUT, don't give up just yet!
Like those who have patience to stand and squish on the T, you'll eventually get to your destination. In this case, you ideal home. Don't be discouraged to see properties that are beyond your budget. Make sure to tell your agent how much you are really willing to pay to get your dream home; chances are, they could also do some sniffing for you and find out how much sellers are really willing to get to move out and move on. Some would-be sellers are unrealistic in their pricing. But others may have listed their property months or years ago, and their price may in fact be doable in today's market conditions and mortgage standards. Reach out to them with an offer and let your agent do the negotiating - most likely than not, you'd be pleasantly surprised with the results.
3. Check rental listings
Why would a buyer go after rental listings? Here's why: The owner may have lived in the home at some point but had to move for a job transfer, divorce or life change. At that time, their home could have been underwater or the market simply wouldn't support the asking price. Instead of listing it with an agent, they just decided to rent it and "ride it out" for a couple of years. Their current tenant might have given notice and, without knowledge of the changing market, the owner simply wants to rent it again. This especially holds true for Boston, since so many students occupy properties that were once home to families. Go see the listing. If you like it, find out if the owner would be open to selling. Make it easy, and they may be on board.
4. Don't ignore overpriced listings
The No. 1 complaint among real estate agents everywhere is working with a seller who's unrealistic about their home's price, especially in this tight market. But as a buyer, you might use it to your advantage. After six weeks or less in some markets, an overpriced home loses its luster. The seller doesn't clean as often. Weeds grow in front. And it just may not show as well. The fading curb appeal, along with an unrealistic price, will keep buyers away.
How is this good for the you, the buyer? Many sellers won't list their home at a lower price but will sell it at a lower price. Go in with an offer before the first price reduction, if possible (your agent should know). Once they do drop the price, other buyers will take notice again, and you may have competition then, but at least you're in the top of the pile.
5. Off-market or pocket listings
Some homeowners want to sell but don't want to or can't list. Maybe they simply don't want the hassle of keeping a clean home and dealing with showings. Or perhaps they're just very private. Especially in the luxury market, some owners just don't want to publicly list their homes.
In Boston, real estate agents regularly network with each other about potential deals. Many of the posh Bostonian neighborhoods share off-market properties to a select group of brokers, one of them BIRE. These listings are also known as "pocket" listings. Brokerage firms - like ours, generally release upcoming listings to their agents a few weeks before they hit the MLS. Work with a well-connected agent and make sure you're privy to these potential opportunities.
Think outside the box
Most active buyers spend months looking for a home the traditional way. Until prices rise enough to bring more sellers and inventory into the market, these buyers will likely keep facing tight housing inventory. That's why it's important to make sure your agent is trying every way possible to uncover opportunities for you. Be open to using non-traditional methods to beat the competition and take advantage of low interest rates and favorable pricing while you can.