You have found the ideal nearby neighborhood and for years have coveted a certain house on a quiet street. The fruit trees, creative landscaping and ballpark-size backyard all are terrific pieces of what you envision your all-star place to include. You often say aloud, “If these people ever sell this place, I’d be first in line.”
Then one day, panicked by the number of new people moving into the area, you decide to take the next step in possibly ensuring a leg-up of future competition. You comb the county records to ascertain the legal owner, then write a heartfelt letter to the owner, explaining how the home would be perfect for your family. And, if and when the owner ever considered selling the place, you’d appreciate the chance to have the first opportunity to purchase.
Now, put yourself in the seller’s shoes. How would you react if you got an offer “out of the blue” to buy your house? Would you be more receptive if the pitch came from a real estate agent or from an individual who had little to do with the property profession?
Two companies are now willing to test the waters, offering consumers assistance in making unsolicited sales proposals on homes that are not actively listed for sale.
Walnut Creek, Calif.-based Reply.com, a lead-generation Web site that has linked consumers with real estate professionals in a specific area, will now send a potential buyer’s unsolicited proposal package to a seller via Priority Mail for $24.95.
“Conceivably, every home in the country is for sale — for the right price!” said Payam Zamani, Reply’s chairman and CEO, who started the company in 2001. “At any time, only a small percentage of homes in America are actively on the market. With the unsolicited offer service, we believe we can stimulate commerce by connecting a homeowner, who may have been thinking about selling their home, to transact with a prospective buyer through Reply.com.”
The site also provides access to valuations of most homes (plus cars and trucks) in the country and encourages visitors to write personal reviews on homes, view aerial photos and parcel maps, and search information about neighborhoods.
Not unlike Zillow and other property sites, Reply.com users can view additional details on the property, including the number of bedrooms and bathrooms, square footage and lot size, historical value changes, and a list of recent transactions in the area.
Reply officials say they do not plan on selling the names of consumers who want to make an offer on a home. To keep agents from feeling left out of the picture, the company proposes to “close the loop” of a deal by suggesting that consumers search for a qualified agent on the site.
Seattle-based Redfin, which featured mapping capabilities before receiving $8 million of new funding from investors like Vulcan Capital and Madrona Venture Group, rolled out an online brokerage in Seattle and the San Francisco Bay area. The business model calls for potential home buyers to do the search work themselves and then receive a rebate on the traditional commission when the deal closes.
According to Glenn Kelman, Redfin president and chief executive, the company has been working for the past 18 months on an unsolicited proposal program for buyers and sellers. The company has not set a price for its “First To Know” service.
“I think you are really looking at two different types of buyers who use the concept,” Kelman said. “First you have the dream buyer who has always dreamed of living in a particular home and has loved the place for years. An approach to a seller in this case would be more appealing if it were more personal.”
However, a pitch coming from an investor might have a better chance of success if it were more “institutional,” according to Kellman. If the investor has his ducks in a row — mortgage pre-approval, accurate comparable sales, acceptable building plans — the owner might see him simply as the early bird who got the worm for doing his homework.
So, which offer will be more pleasing to the seller?
“I really think it depends how the offers come,” Kelman said. “Some people feel embarrassed at going door to door yet we feel we’ll be there to help them prepare in their effort to directly work with another consumer.
“I think it’s all about being direct, whether the consumer needs a lot of help, a little or none.”
Tom Kelly’s new book “Cashing In on a Second Home in Mexico: How to Buy, Sell and Profit from Property South of the Border” was written with Mitch Creekmore, senior vice president of Houston-based Stewart International. The book is available in retail stores, on Amazon.com and on tomkelly.com. Tom can be reached at news@tomkelly.com.
