The Multiple Listing Service (MLS) can be an incredibly valuable tool for wholesalers looking to find discounted properties. Many wholesalers focus their efforts on off-market deals, but the MLS offers a wealth of opportunities that, when used correctly, can provide a steady stream of profitable wholesale properties.
The key to successfully finding wholesale deals on the MLS is using the right filters. MLS platforms often have advanced search capabilities that allow you to narrow down your search and focus on the properties that are most likely to yield high returns. In this article, we’ll explore the best MLS filters to use when searching for wholesale deals.
Why Use MLS for Wholesale Deals?
Before diving into specific filters, let’s quickly discuss why the MLS is a useful tool for wholesalers. MLS platforms provide detailed and up-to-date information on properties that are currently for sale, including important details such as the asking price, days on the market (DOM), and the condition of the property. This information can help you find motivated sellers and distressed properties at a fraction of their market value.
The MLS can also help wholesalers:
- Gain access to a wide range of listings from various neighborhoods and price points.
- Identify properties with motivated sellers.
- Compare prices and assess the property’s value more easily through detailed listing data.
By using the right filters and strategies, you can filter out properties that don’t meet your criteria and focus only on the best wholesale opportunities.
The Best MLS Filters for Wholesale Deals
To find wholesale deals on the MLS, you need to use specific filters that can help you identify properties that are below market value, distressed, or otherwise underpriced. Here are some of the most effective MLS filters to use when looking for wholesale deals:
1. Price Reductions
Price reductions are a strong indicator that the seller is motivated and open to negotiating. If a property has experienced a significant price drop, it could signal that the seller is eager to sell quickly, which is an ideal situation for wholesalers.
- How to use it: Filter MLS listings by those that have experienced price reductions within a specific timeframe (e.g., last 30 days). The more drastic the reduction, the better the opportunity might be for negotiating a lower price.
- What to look for: Look for properties that have had at least a 10-20% reduction in price. These properties are often priced too high, to begin with, and the seller may be more willing to negotiate further.
2. Days on Market (DOM)
Properties that have been sitting on the market for a long time can be great opportunities for wholesalers. Sellers of properties with high DOM are often more willing to accept lower offers, as they’ve struggled to sell for an extended period.
- How to use it: Set a filter to show properties that have been on the market for a specific number of days, such as 30 days or more. You can adjust this filter based on your market’s average DOM to identify properties that have been lingering for too long.
- What to look for: Properties with 30+ days on the market are prime candidates. Be sure to review the property’s price history and make note of any price reductions or other factors that might indicate a motivated seller.
3. As-Is Properties
“As-is” properties are homes being sold in their current condition, with no repairs or improvements made by the seller. These properties are typically sold at a discounted price because buyers must factor in the cost of repairs.
- How to use it: Look for properties that are listed as “as-is.” These are often a good indication that the seller is not looking to invest further in the property, which could present an opportunity for you to negotiate a lower price.
- What to look for: When a property is labeled as “as-is,” it’s often an indicator that the seller is not willing to make repairs, which could be due to the property’s condition. Use this to your advantage when negotiating with the seller.
4. Foreclosures and Short Sales
Foreclosures and short sales are often heavily discounted properties, as the seller (typically a bank or lender) wants to offload the property quickly. These properties can offer significant profit potential for wholesalers.
- How to use it: Use filters like “foreclosure” or “short sale” to identify these types of properties. Some MLS systems have specific search categories for distressed properties, making it easy to find these listings.
- What to look for: These properties typically sell below market value because they’re sold by lenders who want to recover some of the unpaid mortgage balance. Be prepared for a longer process, as foreclosures and short sales can be more complicated than traditional sales.
5. Property Type Filters
The type of property you target can play a huge role in determining your wholesale strategy. Certain property types are more suitable for wholesaling than others, especially distressed properties that are often easier to acquire at a discount.
- How to use it: Use property type filters to narrow down your search to specific types of properties such as single-family homes, multi-family homes, condos, or townhouses. Focus on property types that are more likely to be distressed and priced below market value.
- What to look for: Single-family homes and multi-family homes are often the best candidates for wholesaling. These properties typically have a wider buyer pool and are in high demand.
6. Keywords and Descriptions
Some MLS platforms allow you to search for specific keywords or phrases in the property descriptions. This can be a valuable tool for finding properties that meet your wholesale criteria.
- How to use it: Use keyword filters to search for terms like “handyman special,” “fixer-upper,” “motivated seller,” “estate sale,” “as-is,” or “needs TLC.” These phrases are often used to describe distressed properties that may be suitable for wholesaling.
- What to look for: Look for descriptions that indicate the property needs repairs or the seller is in a hurry to sell. These are often good signs that the property could be purchased at a lower price.
7. Expired or Withdrawn Listings
Expired or withdrawn listings are properties that were previously listed for sale but failed to sell within the listing period. Sellers of these properties are often more flexible and motivated to sell quickly, making them prime candidates for wholesaling.
- How to use it: Set your MLS filter to show expired or withdrawn listings. Contact the listing agent or seller to inquire if they’re still interested in selling.
- What to look for: These properties may have been overpriced when initially listed, but after some time, the seller may be willing to accept a lower offer.
Additional Tips for Wholesale Success on the MLS
While using filters is crucial for finding wholesale deals on the MLS, there are a few additional tips to help you succeed:
1. Build Relationships with Listing Agents
Often, wholesalers find that building relationships with listing agents can be a key strategy for securing wholesale deals. Agents may alert you to deals before they’re widely known, especially if they know you are a serious investor looking for wholesale properties.
2. Understand Local Market Conditions
The MLS data is only useful if you understand the local market conditions. Make sure you research the specific area in which you’re searching for wholesale properties. This will help you determine whether a property is truly underpriced or if it’s simply overpriced for the market.
3. Have a Reliable Network of Buyers
Before putting an offer on a property, ensure you have a list of investors who are willing to buy wholesale deals. Having a solid network of buyers will allow you to move quickly when you find the right property and ensure that you can assign the contract to an interested party.
Conclusion
Finding wholesale deals on the MLS doesn’t have to be difficult. By using the right filters, you can quickly identify properties that are priced below market value and may present profitable opportunities. Price reductions, days on the market, and as-is listings are just a few of the best MLS filters for identifying potential wholesale properties.
If you’re serious about building a profitable wholesaling business, make sure to incorporate MLS listings into your strategy. With the right approach, the MLS can provide you with a steady stream of discounted properties that can be resold for a profit.
FAQs
1. Can I wholesale MLS-listed properties?
Yes, MLS-listed properties can be wholesaled if you have an assignable contract. Be sure to follow local laws and regulations when wholesaling MLS properties.
2. How do I know if an MLS property is a good wholesale deal?
Evaluate the property’s market value, repair costs, and your desired profit margin using the Maximum Allowable Offer (MAO) formula. If the numbers work, the property could be a good wholesale deal.
3. Can I use the MLS without being a real estate agent?
Typically, MLS access is available through licensed real estate agents. You can partner with an agent to gain access or use MLS aggregator websites.
4. What are the best MLS filters for wholesaling?
Key filters include price reductions, days on the market, as-is listings, foreclosures, short sales, and expired or withdrawn listings.
5. Can I find wholesale deals in a competitive market using the MLS?
Yes, even in competitive markets, using the right filters and focusing on distressed properties or motivated sellers can help you find profitable wholesale opportunities.
