Michelangelo Floridino had a client who had held off selling his house because it needed repairs.
His colleague at Landing Real Estate had a prospective buyer who had a federal loan for veterans with zero percent down. That was good for the client, but made her less competitive against bidders who could offer big down payments or more than the asking price, two hallmarks of buying in Maine’s hot real estate market.
Floridino thought outside the box to match the two, putting together an unusual real estate deal that worked for the seller and the buyer. He got the buyer to agree to sell without having to fix it up or list it, with the accompanying showings, in a so-called off-market sale. The buyer took it as is.
Inventory shortages have become so acute over the past year that Floridino and other brokers have had to get creative and look beyond the Multiple Listing Service that agents share to find homes to sell. The vast majority of homes still are sold using the service. There are no official numbers on off-market homes for sale, but Floridino expects the numbers will grow as long as inventory remains tight.
In April, only 2,300 single-family homes were listed for sale in Maine, about one-third the number in 2019 before the pandemic, according to the Maine Association of Realtors. It is a tough market even with the best credit.
“Buyers are frustrated,” Floridino said.
In his off-market sale, the buyer, a mother with two young children, closed on the two-family home in Sanford at the end of May. Seller Max Potvin, the general manager of Jonathan’s Restaurant in Ogunquit, had moved out two years earlier and had been renting it out. Floridino sold him his current home in Berwick, and checked back with Potvin to see if he was ready to sell the Sanford property.
“It was an older property that needed to be cleaned up,” Potvin said. “The off-market offer was a big time saver for me and I didn’t have to show it.”
He sold the house for $330,000, about $10,000 less than he had wanted. He figured it was a good time to sell and in looking at other listings in Sanford, he could not have done much better.
“I’m happy with how things turned out,” Potvin said.
For prospective buyers worried about the scarce inventory, there are more homes available than those on the listing service and Zillow.com, according to Harrison Wolfington, co-owner of Laflin & Wolfington Realty in Farmingdale. He scopes out expired listings — those that didn’t sell before the listing contract ended — to see if homeowners are ready to sell again and looks at auction sites to dig up as many off-market homes as possible.
“We’ve started doing some advertising directly to neighborhoods that our buyers are interested in saying, ‘We’ve got a buyer, and if you would ever think of selling please give us a call,’” he said.
Wolfington said off-market homes can potentially save buyers thousands of dollars, because they eliminate the multiple bids that drive up prices.
“It’s a one-on-one conversation, like being the only person at an auction and talking to the auctioneer,” he said. “That can save buyers big time and can even make the difference between someone being beat out over and over again.”
His company also has a program to help backstop prospective buyers worried about coordinating a sale and new purchase. Under the program, he will offer to buy the owner’s home at a below-market rate, assuring the buyer won’t be stuck with a new home and their old home if the two transactions don‘t coincide.
Wolfington said it is important to prepare buyers for what they will be facing, including the many homes that sell for over list price.
“We have to get them mentally prepared before we even go to look at any houses,” he said. “And we show them different strategies to try to make their offer more competitive.”
