Buyer Case Study: Finding Off-Markets For Anita

June 11, 2024 

What’s it like to work with us as your buyer’s agents?  You get to proceed at your chosen pace, we help you find hidden (off-market) inventory, and make sure you get a great deal. Let’s take a real example of all of this. 

Meet Anita, who in July 2020 needed a new home.  As an emergency room physician during the early and wild stages of the COVID pandemic, she was quite busy literally saving lives.  She needed to buy, and had seen one house that caught her fancy, and called us to help.

Jumping into Action

We quickly assessed her needs and wants, ran her through our “Intro to Buying” class—all our buyers get an intense education about the players, process, contracts, and timelines of the home buying process *before* we are in the middle of a deal—and swiftly went to see that first home.

It was a neat home, in a great location, but literally built around a tree.  A protected oak tree actually emerged from a hole in the roof and was otherwise surrounded by house.  We explored, we poked, we prodded, we reviewed disclosures, but this was not the right home for Anita.

Moving at Your Pace

We were actually not ready to put in an offer.  Anita needed to get her finances in order, which involved selling a property in Houston among other things.  Plus the demands of her career were intense.  So we took a break until she was ready to act.

This is no problem.  As realtors, we feed off your energy and urgency.  Sometimes you are too busy to house hunt, or something knocks you off your planned timeline.  It’s cool.  An average buyer client of ours might be in contract 2-3 months after starting to work with us.  But the range is huge—from 5 years (and counting!) to 3 weeks for our speedster superstars.

Five months later in December 2020, the stars aligned again.  Anita was free of Texas and ready to act!  We saw some houses to calibrate ourselves (we get to see how our client reacts to a certain house, and the client gets to see how far their money goes).  Our problem was that December is a very slow month in Silicon Valley real estate.  So that’s when we got creative.

Finding Hidden Inventory

Some listing agents take their inventory off the market for the Holiday break.  Many buyers and sellers choose to focus on other things during this time, and you can reset the “Days on Market” stat if you are off for 30 days or more.  We question whether this is always a good idea for sellers; not everyone is away on vacation.  Make your agent work!  But in this case we’re on the buy-side, so it’s great!

We scoured the MLS for properties that met Anita’s criteria but had been recently cancelled or withdrawn.  Six properties looked good.  We called all six listing agents up on December 26th and, sure enough, the properties were all actually available and just “taking a break”.  Three looked good to Anita.  So we went to visit them. 

One really stood out: a large, newly renovated single-level home not far from the hospital where Anita worked.  It had been on for 33 days before being withdrawn, but we were amazed when we walked in.  First of all, it was great!  Secondly, we had it all to ourselves!  No panicked rush to make a high-stakes decision against hordes of other buyers.  We wondered why this gem was still available.  These were the COVID boom times for real estate after all—multiple offers going way over asking.

Getting a Great Deal

The disclosures told us why this great place was still available.  We reviewed and analyzed several inches of paper about the home.  It was superficially scary.  Plumbing leaks, toilets not affixed properly, and an ominous crack in the foundation… the list went on and on.  There were so many problems that it looked like *nothing* was done properly.

But this is where our Developers Eyes kicked in.  We’ve built over $100 million of luxury homes in Silicon Valley, and are quite comfortable with the building trades.  We don’t swing the hammers ourselves, but we can ballpark estimate a project pretty well, and know experts to call in if we are not sure. Doing work does not scare us; we actually run towards that kind of opportunity!

This house was a recent renovation—an older house was taken down to the studs and remade.  And the developer in this case seemed to take the house to 97% finished and called it a day.  But we looked at this as an opportunity.  This was why the house had not sold.  

A leaking pipe in a 72-year old home… which this technically was… would be an invitation to fungus, termites, all manner of pests—maybe even mold.  But this pipe was only leaking for a few months, because it was effectively a new construction!  That’s no problem.

A foundation crack over 1/8th of an inch is the rule of thumb on when to call in an expert, so we planned to write an offer contingent on a foundation inspection.  This might be a problem.

Fixing a toilet seat that was improperly placed is a job that can be done for hundreds, not thousands of dollars.  There were lots of little things like this.  Each one of them: some small work, but not problems.

Then we did our comps analysis—a deep dive into what similar properties sold for, calculating their dollars per square feet, and multiplying by our target property’s size to get a fair market value.  We were delighted by what we found:  it seemed to be worth $3,514,000 on our spreadsheet, but was listed at $2,989,000!

So we had half a million of value just lying there, apparently because the seller had some desire not to clean up a property inspection report that should have been a to-do list for them.  We were thrilled. It was January 1, 2021.

Winning and Managing Escrow

We prepped an offer and submitted it on January 6th.  The house was still off-market.  We offered $2,808,000… because we could.  They countered us a day later at $2,888,000.  We accepted it.  Anita was thrilled.  We absolutely avoided the frenzy of competing with other buyers, and saw a great deal, and got into contract.

We got our best foundation guy out there as fast as we could on January 15th.  He told us that the crack was not a problem (phew!), but various other things were not to his standards.  It would by $16,000 to whip the concrete into shape.  Not a problem!  We waived our protective contingency.

Escrow has a lot of moving parts.  We had appraisers to meet.  Lenders to remind.  Walk-thrus and signoffs and contingencies and inspections and deposits and designer decisions… it’s a tightly choreographed ballet where lots of parties need to interact relatively flawlessly.  We act as a conductor of this organized chaos, looking out for our buyer’s interests. In this case, we even moved COE up by 3 days to close early!

After COE and Into the Future

We celebrate our clients’ success with them, and Anita was delighted at the results.  We bought a ~$3.5 million house for $2.9 million (plus a modest amount of small work).  The foundation got spruced up, and the plumbing issues were all addressed.  We also give our buyers 8 hours of free handyman service for all the little things, and pretty soon the movers arrived and our happy client moved in.

And we don’t go away when the deal is done!  We invite our clients to parties and get them over for dinner.  We provide landscapers and design advice and whatever you need to make your new house work.

We did it for Anita, and if you’re looking to buy, we’d love to do the same for you.

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