A reader forwarded me this email, which he received from a local real estate agent in his area:
Having a hard time finding a house? Here is a list of houses that are investor owned and will be coming on the market soon. Call me for more information and/or a showing appointment! If occupied please do not disturb occupant!
What follows is a list of twenty-three homes, with address, description, and vague pricing statements like these:
- “Will be affordable – no more than $139,900.”
- “Final asking price will be in the very high 200s.”
- “We haven’t set an asking price on this one yet.”
- “It will be at the high end of the comps.”
- “We could sell it as is in the $240k range, or fix it and sell it in the $279k range.”
“I’m unclear what the point is – would they really sell before it hits the MLS,” asks the reader.
At first glance, it does seem odd that anyone (whether an investor or just your average home owner) would try to sell a home without giving it the most exposure possible by listing it on the MLS.
I believe that the motivation here is probably that the investors are hoping to find some sucker that thinks they are getting a “good deal” by snagging a home “before it’s listed.” The hook that these homes “will be coming on the market soon” gives the potential buyer a sense of urgency—hurry up and act now, before everyone else finds out about these amazing deals!
This sort of thing is pretty rare in a market where there are plenty of homes on the market to choose from, but with the increasingly scarce inventory we’re seeing on the market recently, I’m not surprised to see it making a comeback.
Actually, I’m fairly certain that the people I bought my home from fell for this sort of scam when they purchased back in 2006. After being held by the same owner since 1980, my home was listed on the MLS in January 2006. It went pending in just a week and the sale to a presumed “investor” closed in February at $267,000. In July 2006—just five months later—it sold again (to the family I purchased it from), this time completely bypassing the MLS. The sale price: $364,000. And no, there had not been any improvements on the home during those five months. It was just a pure, unfiltered ripoff.
That’s the kind of thing that I suspect these investors are hoping to pull off. It probably won’t work as well today as it did during the height of the housing bubble frenzy, but then again, as Einstein is alleged to have said, “Two things are infinite: the universe and human stupidity.”