At a real estate meeting last week a local real estate investor, Jon Zorrer, gave us all a great tip on how to build a buyers list through the MLS.
Step #1: Get MLS Access
For new Investors this part is going to be a challenge. I had a tough myself and ended up just getting my license. Many experienced investors tell you to get MLS access like you can pick it up at the corner grocery store. They forget how difficult it can be if you are brand new to Real Estate and have yet to form any real relationships with agents or other people in the industry. Below is a short list of some good angles to take in trying to get access.
- Ask a friend who is a sales agent or appraiser. Everyone knows a real estate agent or someone with MLS access. The problem is we never realized it, so start asking around.
- Befriend an agent. Kelly Miller wrote an awesome article, How to: Get MLS Access with out a License, on my site that outlined a method for getting MLS access of your own.
- Become a Sales Agent by taking the licensing course and hanging it with a brokerage. This will cost you anywhere from $1,000 to $2,000 a year in dues and fees but will be worth it if you can get deals
Step #2: Find all the REO Agents
The reason you want to search for REO agents is that many REOs are bought by investors (your potential buyers). You won’t be able to get the purchasers name and address from the MLS, but hang with me for a few more steps and you’ll see how you can get this information.
To find the REO agents, do an MLS search on the REMARKS field(s) for words such as…
- Bank (or Bank Owned)
- Third Party
- The name of a bank such as Wachovia, Chase, etc…
Step #3: Get REO Agents’ IDs
Now click through each and every search result and locate the Sales Agent who was responsible for the sale of this property. Click on their name (assuming you can click on it) to drill down to their information. Take note of their Name and Agent ID and jot it down in a spreadsheet or notepad.
Step #4: Do a reverse look-up in the MLS for each REO Agent’s ID
Once you have gotten enough Agent ID’s you will now do a reverse lookup in the mls for all the properties sold by each REO Agent. I like to do it one at a time, but depending on your MLS you may be able to plug in all the Agent IDs and return ALL the houses at one time. Doing them one at a time though will help you get a better feel for which REO agents are most active.
Step #5: Find all the properties that were sold for Cash
In most MLS systems there will be a field that designates what type of funds was used to purchase the property. You’ll see such things as…
- Private Financing
- See Remarks
You will obviously want to find all the properties bought using CASH. Write down the property address for each sold listing into a spreadsheet or on a notepad.
Step #6: Look up the tax records for properties found in step #5 to find the owner of record
In order to get the cash buyers information you’ll have to look up each property address on your local tax assessors website. There you will be able to find the name and address where the tax bill is being sent. That right there is your brand spanking new Cash Buyer!
There are a few things to look for however because not all the cash sales will have been bought by an investor buyer. A few guidelines I go by when looking are…
- If the tax address is different from the house address that is a cash buyer and I record that
- If the tax address is the same as the houses address then I keep that property on the “Addresses to Lookup List” to check again at a later date. The tax assessors site is not updated every day or even every week or month (depending on where you live) so the new owner’s information might not have hit the site just yet. So check again in about a month.
- After 2 months of checking with no change of address, then I’m almost certain that the Cash Buyer is actually an owner occupant and I discard the lead. Sure there will be a few instances where the investor has moved into the property to rehab it, but to me that means they don’t have a lot of money for purchasing more properties anyway.
Step #7: Rinse and repeat every few months
The great part about this buyer list building method is that you can do it over and over and over again. Once you can build up a good system it probably won’t take very long either.
Hopefully this idea can help some people out!
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Excellent advice. That is how I scout the MLS for buyers. I also look at every property sold within the last week. Rehabs are easy to spot and it tells me who is flush with cash and possibly looking for another deal. This post is easily a top 10 for information.
these sure are great
Great info. I was wondering what kind of fee you would be paying the agent that is working with you? I love the idea of having MLS access, just not sure how to compensate the agent If I get a deal using her help. Scott, great job writing this blog. I went back and read every page to see how far you have came. I have decided to do probates as well and I’m just getting started.
Wow! you went back and read every page? I’m flattered!
To answer your question about compensation for the agent. The usual method is a promise to list all your properties you’ll be selling through that agent. As far as i know you can’t pay an agent a flat fee for just getting listings. So the agent will help you out with the promise that they will get listings from you.
Hope that answers your question and best of luck with investing!
What would I say to these potential investors now that I have there address information?
A real estate agent looking for investors to work with investors
You will want to let them know what you are intending to do (sell the properties or find them properties). Then ask them what they are looking for. It isn’t much different then working with a retail buyer/seller.
Thanks for sharing this info with us.