How to source properties to buy in Austin, Texas
Most people start their Austin home search on third-party aggregator websites, but there are many other sources to find properties, some of which are hidden from the general public.
To make sure you aren’t leaving any stone unturned in your home search, in Episode 22 of Calls with Paul we are explaining the various sources for searching for homes with some practical insights to navigating Austin’s competitive real estate market.
1. Multiple listing service
Most local Realtors cooperate with each other by inputting their listings into the Multiple Listing Service (aka the MLS) where those properties can be seen by other Realtors in Austin. This is where the bulk of the homes for sale can be found.
Operated by the Austin Board of Realtors, the Austin MLS allows local Realtors to search the available homes for sale in the area. Realtors also have the ability to share the results of their search with their clients. However, the general public cannot directly access the MLS… That means you’ll want to have an experienced Realtor set up a search for you and communicate regularly and quickly about new homes that come to market.
Plus, if you’re not familiar with Austin or the home-buying process, it’s a good idea to get some expert guidance. Talking to an experienced Realtor can save you hours of hit and miss searching.
Because the general public can’t freely search the MLS, most buyers turn to third-party aggregators as the starting point in their home search. These sites, like Zillow or Trulia, often have agreements with the MLS which allows them to access and re-post the MLS listings on their third-party sites. As a result, these aggregators end up being a backdoor way for the general public to see what is in the MLS.
Except… You still may not see everything that’s in the MLS if you search these aggregator sites. Realtors have to agree to allow their listings to be syndicated to these websites, and not all Realtors give permission. When we’ve run our own comparison tests, we’ve still found a decent number of homes on the MLS that are NOT available on the third-party sites.
However, it’s still worth checking those aggregator sites (for now, at least) because they also feature some properties that you won’t find in the MLS, like homes that are listed for sale by owner. Which brings us to another source…
3. For sale by owners
While the data shows that people that choose to sell their home independently without the help of a Realtor make less money on their home, some people still take that path. As a result, developers created platforms that allow for sale by owners (FSBOs) to market their properties online.
Some of those FSBO listings show up on aggregator sites and some don’t. So not only do you need to source properties from the MLS and aggregator sites, you want to check FSBO sites too.
4. Brokerage sites
But that’s not all… Many large brokerages also often have exclusive listings on their individual websites. Compass agents, for example, post their coming soon listings exclusively on the Compass website before going on the market. If you’ve been losing out on deals, these coming soon listings are a great place to get a sneak peak (or head start) on the market. It does mean, however, that you’ll have one more place to check for listings…
5. Off-market listings
And then there are homes that are not publicly listed for sale. Quiet market, off market, pocket listings, private exclusive… Whatever name it goes by, it really just means the home is not listed in the MLS.
How many off-market listings are we talking about?
More than you might think. We did some informal sleuthing of our own in October 2019 and found over 370 off-market listings in Austin – the equivalent of 4.5% of the homes for sale. At any given time a buyer could be missing out on 350-450 listings if their agent isn’t searching the key spots where off-market listings are shared. In Austin’s competitive real estate market, those extra listings can make all the difference.
Here’s how the off-market listings broke down:
- 194 homes were on an exclusive networking group for homes priced $1M+
- 103 homes were on the Top Agent Network shared nationwide
- 58 homes were listed at Compass.com
- 15 homes were listed at a competing brokerage
Reasons people list their home off-market
While we put most of our Homesville listings in the MLS, there are situations when sellers might prefer to list off market. We are often asked why a seller would choose not put their home in the MLS. We polled our Compass colleagues across the nation, and here’s what they shared:
Privacy –- Certain sellers want (or need) to keep their impending move quiet. Celebrities, for example, may not want word to get out prematurely that they are moving. People that work from home may need privacy to conduct business without a large volume of buyers parading through the home.
Job concerns -- CEOs or other high wealth clients may have business reasons for keeping an upcoming move under wraps. Perhaps they are changing companies, and it’s too early for people to know. In some cases they might miss out on bonuses if word got out. In other cases early news of a departure might cause a team to lose cohesion.
Serious buyers only -– In some cases sellers don’t really need to sell, or they only want to be bothered when there is a serious, qualified buyer interested in the home. Off-market status is a way to test the market and limit access to those that are serious about buying.
Market issues -– Placing a home for sale in the off market network can be a way to test the price before actually listing the home in the MLS. The opposite can also be true. Perhaps the home was on the market, but the agent pulled the home off the MLS temporarily so that it doesn’t get stale or shopworn during a seasonal slowdown.
Exclusivity -– Some people are attracted to the feeling of luxury and exclusivity of buying a home that isn’t available on the general market. Similar to a coming soon, this can fuel a fear of loss that generates a sale before the home goes to the MLS. The downside is that the seller will never know how the full force of market competition would have impacted the final sales price. Whatever the seller chooses, he or she needs to be comfortable with the risk.
(Thank you to Courtney Smith in Los Angeles; Dawn Thomas in the Silicon Valley; Carolyn Davidson in Walnut Creek; Haneen Hayder and Kenneth Er in San Francisco; Less Arnold in Boston, and Amit Bhuta in Miami for sharing your perspective on why clients list off-market.)
So how do buyers find out about these off-market properties?
There are many networking groups where Realtors have to pay for membership to access off-market listings that you won’t find on other sources. The membership fees are high, and some agents don’t meet the prerequisites to participate in these exclusive groups. That means that if your Realtor doesn’t invest in accessing those groups, you may not aware of all the properties that fit your search criteria. When interviewing a Realtor, be sure to ask how they will source properties for you.
House hunting in Austin doesn’t have to be this hard
It can be frustrating to realize you aren’t seeing the full array of homes for sale, and it can be even more frustrating to stay on top of these sources on a regular basis. And this isn’t even an exhaustive list!
It doesn’t have to be this hard. An experienced Realtor can be worth their weight in gold by making sure you don’t miss out on the right opportunity. They do the leg work and check all of the sources so that you don’t have to. If you want help finding your place in Austin, reach out for some candid advice and experienced guidance.