Searching Coming Soon Homes For Sale Might be a Waste of Time

Searching For Coming Soon Homes For Sale, Might Sound Good or Even Clever

In a warm or hot seller’s market,  searching for Coming Soon Homes for sale can be more frustrating than trying to search for homes that are already active. But there is another solution to find overlooked homes.

In today’s hyper-competitive real estate market, prospective homebuyers are constantly seeking ways to gain an edge in finding their dream home. One very popular tactic is to search for “Coming Soon Homes For Sale,” hoping to get a jump on the competition. However, in many cases, this strategy may lead to frustration and disappointment for a variety of reasons in addition to fierce competition. Instead, a more strategic approach might involve looking backward – specifically, exploring homes that didn’t sell six months or more ago through the Multiple Listing Service (MLS).

The current state of the housing market is characterized by a severe shortage of inventory. This imbalance between supply and demand has created a highly competitive environment where properly priced homes in decent condition often receive multiple offers within days, if not hours, of being listed. As a result, homebuyers searching for “Coming Soon Homes For Sale” may find themselves facing stiff competition from other eager buyers, ultimately leading to bidding wars and inflated prices.

Moreover, the “Coming Soon” designation often creates a sense of urgency among buyers, prompting them to make rushed decisions without fully evaluating their options. This can result in buyers settling for properties that may not meet their needs or paying more than they originally intended.

Likewise, searching “Coming Soon Homes For Sale” in Google or other search engines is not a catch all. While most real estate agents that have a “Coming Soon” listing will list it in the MLS which will propogate it to all the other online real estate search portals like Zillow and Redfin. But, sometimes the property never even makes it into the MLS and as a result never shows up on any searches.

For example we took a listing recently, dropped a sign in the yard and before we could even get to a computer to enter it into the MLS, and we’re only talking about hours, I had received no less than 30 calls from buyers and agents aggressively scouring the neighborhood for new opportunities. Needless to say, the calls continued for days and multiple offers were received. In the end a buyer agreed to purchase the home for a much higher price without asking for any kind of repairs. Lots of other buyers were very disappointed.

Find Homes That Failed To Sell

A great alternative that most people never think of is, looking backward through the MLS for homes that didn’t sell in the past. We usually look six months or more and this tactic can provide several advantages to home buyers. First and foremost, these properties are almost guaranteed to to have less competition, if any, compared to “Coming Soon” or Active listings. Almost all buyers overlook these properties in favor of newer listings, giving savvy homebuyers an opportunity to negotiate with sellers who may be more motivated to make a deal.

But why are failed sales overlooked?

Properties that failed to sell in the past are practically always overlooked for a couple of reasons.

1. Most online real estate portals don’t give an option to see failed sales as a search criteria. Whether it’s EXPIRED, WITHDRAWN or CANCELLED listings, they won’t show up because most of these portals are selling buyer leads, which is YOU, to the agent. Since buyers don’t typically look for these types of properties, it’s not a viable lead for them to sell. Also, the agents don’t get excited about chasing these types of properties because of the next reason.
2. Properties listed in the MLS whether Coming Soon or Active, offer a commission to a cooperating buyers agent. For properties that failed to sell, there is no guarantee that the seller of the home, that is no longer under a contract, will pay any commissions at all. As a result agents get nervous about exposing their buyers to these types of properties.
3. There are relatively fewer homes that failed to sell on the MLS than there are Active and Coming Soon Homes For Sale. For example, in Orange County CA where I work, as of this article, there were only 850 homes that failed to sell between 6-12 months ago. By contrast, during that same time period, 9,536 homes actually sold. So it’s less to choose from.
4. These types of properties are always perceived as having something wrong with them. This isn’t necessarily true. Some are just priced wrong or their agent did poor marketing.

The Advantage of Hunting Failed Sales

Something else to consider is, homes that have been off the market for an extended period may present opportunities for price negotiations. Sellers who have struggled to sell their homes in the past may be more willing to entertain offers below their original asking price or offer incentives such as closing cost assistance or home warranties. Even if they are sticking to their original asking price, the house might be worth more now since time has passed allowing them to get that price and get you a better deal as well compared to other active properties.

If they didn’t sell before, why would they sell now?

There’s lots of potential reasons. Maybe they were just testing the market a year or more ago and it didn’t get them the price they were after. Well, with prices increasing, maybe they can get their price now where everyone’s happy. Maybe they had a life situation like their family was growing and it wasn’t critical they move back then but now with a house full of toys and kids running around, that idea has changed drastically. Maybe it was an owner looking to downsize. At the time maybe it was just them trying to plan ahead but, if you approach them now, maybe that downsizing has become a need instead of a want. You never know what their reasons are but if you don’t go find out, you’ll never know.

Also, there is virtually NO Competition. Yes, agents are sending mailers and even knocking on these doors on the hunt for a listing but I can tell you with a fair amount of certainty that there’s no buyers taking this approach.

So How Do I Get To These Failed Sales?

Come Up With A Plan

First thing you have to do is decide if you’re going to do this hunt on your own or try to enlist the help of an agent. Remember, most agents won’t pursue these types of properties because there’s too many uncertainties for them. But we do this kind of hunting all the time, so if you’re looking in Orange County CA let us know. If you’re in another area, we can connect you with an agent that thinks just like us.

Do It On Your Own

If you decide to work with an agent, skip to the next section. Otherwise do the following.

1. Narrow down your area of interest to a few cities or even just a few communities.
2. Call us to get you a list of properties that failed to sell. We’ll send them to you for free.
3. Go directly to the property and knock on the door. Honestly this is the best way to make a connection. Don’t be weird though. Just let them know you’ve been looking in the area and it looks like they were trying to sell in the past and you wondered if they were still considering selling their home. If so, continue the conversation, maybe they’ll let you look or arrange for a viewing in the next couple days with your significant others or your agent.
   1. Alternatively you can send them a letter letting them know you’re looking to purchase in the neighborhood.
   2. You could skip trace the property to get their names and phone numbers so you can call them or text them directly.
4. If you can strike a deal, it’s just a matter of putting it into a contract and opening escrow. This is when Agent Support is especially important if you don’t know what to do.

Agent Support

If you decide you want to have an agent to do the above steps for you, and we do this all the time, then do the following.

1. Contact your agent of choice and set up a brief meeting. In my opinion, in person is always best.
2. Let them know exactly what you’re looking for and find out if they’re comfortable implementing this strategy among traditional searches. If they are, great. If not, move on to the next agent.
3. Let them find the properties you are looking for.
4. If you don’t get weekly updates, stay on top of them. Just because they agreed to do it, remember, there’s risks for agents digging up failed sales. But when that agent does find one, they can negotiate compensation with the seller.

Fair For Everyone

Keep in mind, if the agent isn’t able to get paid on a transaction, it’s unfair to expect them to do the work. So if the seller for some reason isn’t willing to offer some form of compensation, be prepared to negotiate something reasonable so the agent is incentivized to help you find that home.

Additional Benefits of Taking This Approach

Furthermore, exploring older listings allows homebuyers to gain insights into the local market dynamics and pricing trends. By analyzing historical data, buyers can make more informed decisions about the fair market value of a property and determine whether it aligns with their budget and preferences.

Ultimately, while the allure of “Coming Soon Homes For Sale” may be enticing, the reality of today’s real estate market often means that buyers face fierce competition and limited inventory. Instead of wasting time and energy chasing after elusive listings, prospective homebuyers would be wise to look backward and explore homes that didn’t sell six months or more ago through the MLS. This strategic approach can help buyers avoid bidding wars, negotiate better deals, and find their ideal home in a challenging market.