Real Estate

Sales Strategy: Finding and Selling Absentee Owners in a Low Inventory Market

In a low inventory market, a great strategy is to contact absentee owners, or owners who do not live at their properties. They are probably aware of the market conditions and may already be thinking  about capitalizing by selling their property. Many experts think the US housing market is at or near a peak, especially given rapidly rising interest rates on mortgages, so it may be a very good time for owners to sell.

Here are a few steps you can take:

  1. If you associate regularly with a title company, it is a good idea to ask if they have a list of absentee owners
  2. Whether or not you get a list from your title company, you can also pull county records and search for mailing addresses that are different than the property address – a good sign that the owner does not live at the property.
  3. Send a letter to the property owner to bring the market opportunity to their attention. Be careful not to guarantee a market peak, as projections do not always end up being reality, but you can certainly suggest that it is possible, and may even want to quote the advice of a notable market expert. Include some information about market appreciation over the last few years. It is best to hand write the address information on the envelope to make it more likely to get it opened. Studies show handwritten envelopes get opened much more often. You can also try to identify a phone number for the owner, so you can follow up with a phone call.
  4. Recommend a 1031 exchange with a new investment property to avoid taxation on the gains. In order to assist the owner to achieve the 1031 exchange, you may want to create a relationship with a realtor in another market that does not have the same low inventory issue. That realtor should be happy to pay you a referral fee
  5. If the tenant that is renting the property decides to buy, you may end up with two transactions.
  6. Add the owner to your contacts, whether or not they are ready to sell, as they probably will be at some point. Stay in regular contact. Real estate sales is a long term game.