Bernice Ross, an industry veteran in her latest article for InmanNews, encouraged all agents to consider utilizing one-party listing agreements in a market as supply-scarce as this one.
How does a one-person listing agreement work? The agent approaches a seller to list a property for one specific prospective buyer, a prospective buyer the agent believes will be interested in purchasing that specific property. The time frame of a one-party listing is 30 days…no longer. The seller agrees and is then obligated to pay that agent at closing ONLY if that one specific prospective buyer actually purchases that seller’s specific property.
How does that agent find that prospective buyer for that specific property? By asking her/his prospective buyers to identify several properties they would want to see based on the outside looks of the properties along with any other information the agent may provide them. Then draft a letter to the seller about what the prospective buyers want/need, their price range, their time frame and the fact that they are ore-approved. Ross also suggests hand addressing the letter and enclosing a business card.
Where to look for these sellers?
- Facebook’s Business Offers websites, local newspapers, Craigslist, Zillow’s “make me an offer” properties.
- Prospect expired leases. This is a great way to find owners with multiple properties. Look at your MLS for properties that were leased or expired 8-10 months ago since most leases have year-to-year time frames. In the event the owner has had a “difficult” tenant, the owner may very well be over it concerning leasing and want to sell.
- Check out “Active For Rent” listings on Craigslist, Hot Pads, realtor.com, Trulia, Facebook Marketplace, Oodle.com, etc. Also check with your local title companies to discover who owns which properties and how many they own. You also may want to ask real estate attorneys whether or not they have clients who may be motivated to do 1031 tax deferred exchanges.
Ross suggests approaching potential sellers with an explanation of one-party listing agreements and how they differ from “open” listing agreements. If the seller agrees to a one-party listing, be a person of your word and only show that one property to your one prospective buyer. No back-up prospects.
Ross also suggests that you as the agent representing that prospective buyer only represent that buyer, not the seller. Dual agency can be sticky so Ross suggests that the seller get her/his own agent to best represent the seller’s interests.
