Unlock the Untapped Goldmine: How to Snag Discounted Real Estate Before Everyone Else Catches On

Dave:
Do you want to know which markets offer the steepest discounts and the best deals for investors in 2026? Of course you do. And a great place to start that research is to try and identify where there are motivated sellers who are willing to negotiate and meet your price and terms. But knowing which markets and asset classes have the most motivated sellers is hard. That is until now. Just this week, I uncovered a brand new motivated sellers index that pinpoints which markets have the most motivated sellers, what asset classes you should target, and it even tells you what discounts you should expect to build your offer around. It is a absolute treasure chest of data for real estate investors looking to take advantage of the buyer’s market we’re in. And today on On the Market, we’re digging in.
Hey everyone, welcome to On the Market. I’m Dave Meyer. Today we have a very fun episode because we have brand new data and information about the housing market that I have never seen before. A company called Parcel Labs. It’s a real estate data company. They’ve developed a motivated seller’s index. And over the last couple of days, I have been having a field day with this information, having a lot of fun incorporating this into my own strategy. And I wanted to share it with all of you because it’s really, really valuable. So today on the show, we’re going to talk about why you should care about motivated sellers in the first place. We’ll go through that quickly. And then we’ll get into the index and understand where there are motivated sellers and how you can best use this brand new information to your advantage. So let’s just start and talk about what a motivated seller is.
You probably have heard this term before, but if not, it’s exactly what it sounds like. It’s someone who lists their home for sale and is very eager to get rid of that property. They’re not sitting around waiting for the perfect offer or the perfect terms or the perfect price or anything like that. They’re typically willing to work with the buyer to get something sold relatively quickly. And as a real estate investor, you can probably see that this is a very advantageous position to be in. If you work with a motivated seller, you have a lot more negotiating leverage to get your terms and your price. Now, motivated sellers come from all sorts of situations. You often seen them come from sort of the unfortunate situations that arise, like from probate or divorce. But you see these just with regular people too. Someone gets a new job, they have to move across the country in two weeks.
Whatever it is, they’re motivated to get rid of the house. Now, I would forgive you and understand if you’ve never had the great chance of working with a motivated seller because during COVID there weren’t many of them or maybe they were motivated, but there was just so many buyers that they could still get their price anyway. But right now, I think just the way market dynamics are working is we have more motivated sellers. I’ve talked about it at length on the show. It’s not really from delinquencies and foreclosures, that’s up from the last couple of years. But from a historical perspective, it’s not crazy. We’re just getting back to a regular level of motivated sellers where there are people who want to get rid of homes. And since we’re in a buyer’s market and days on market are going up and things are sitting on the market longer, people are getting a little bit itchier.
Unless you can afford to be patient and have nothing to sell for, there are more and more motivated sellers in the market. And this comes with discounts, it comes with concessions, it comes with better terms. So knowing where to find motivated sellers is super, super valuable. And that’s why we’re going to identify key markets and trends that can help you pick markets, can shape your offers, and help you land incredible deals. So for that, we’re going to turn to this motivated sellers index. It’s super cool. We’ll put a link to it in the show notes. Of course, you can check it out at Parcel Labs as well, but I’m just going to talk through how this Motivated Sellers Index, I’m going to just call it the MSI, is created and what you can do with it. So the way Parcel Labs is doing is they measure three different things to determine if sellers in a given market are motivated or not.
Those three things are days on market, price cut frequency, and price cut magnitude. So days on market is something we talk about all the time, but it’s just how long has it something been sitting on the market because time creates pressure and a listing that is aged past the local norms. People see their carrying costs go up, they start to worry that their listing has gone stale. They maybe see a little less foot traffic when they do an open house, there are less showings. That increases pressure. People get a little bit nervous. Maybe they get a little more motivated. The second thing is price cut frequency. So how often are they cutting? This is something that is super valuable. Anecdotally, I’ve done this in the past, but if you see someone cutting one weekend and then the next weekend and then a third weekend, that person is pretty motivated, right?
So that’s the second thing that’s measured there. The third thing is price cut magnitude. So how deep are those cuts? Because some people maybe just cut 1% to get it to the price drops filter on Zillow or Redfin or whatever. But if you’re dropping 10%, that shows a little bit of desperation. I should say motivation, maybe desperation. We don’t know. But when you combine these things, this makes sense to formulate the motivated sellers index. We got days on market, price cut frequency, and price cut magnitude. And by combining these three things into just a single number, you can actually evaluate which markets are the most motivated, which markets are the least motivated. And even if you’re not shopping markets right now, this information can really help you formulate your offer. Because you might be investing in your backyard and if things are really motivated, if people are just fire selling deals, that’s going to change what you should offer.
You should try and extract as many concessions as possible in some of the episodes we’ve been talking about, how effective asking for concessions are. You can formulate your strategy around that. If you’re in a neutral market, you can’t do that. They’re going to ignore your offer. So this information really matters to all investors. And it’s very difficult, at least in my experience, it has been very difficult to look at days on market and price cut frequency in depth on your own and try and say, “What is going on here?” That’s a lot of information to aggregate yourself. You can’t do it. I mean, you could if you had a data feed, but it’s difficult. So having this one number really does help. And the way they’ve done it, Parcel Labs has done it is they’ve basically made it a one to 10 score with one being low, like neutral, people aren’t really motivated, 10 being the highest, and they actually break it down into four different buckets.
And if you’re watching this on YouTube, I’m actually just going to pull this up right now. I’m going to just show you this. You can see the URL, you can go look at this yourself too. But basically between zero and 2.5 is neutral. Between 2.5 and five is stubborn. So people aren’t really trying to sell, but they’ll do it a little bit. Between five and seven and a half is motivated. And then between seven and a half and 10 is fire selling. So those are the most motivated markets in the country if you’re between seven and a half and 10. And if you look at the national housing market right now, the whole United States, it’s slightly motivated. Five is the line between stubborn and motivated. And on a national basis, we’re at 5.1. So a little bit motivated. It’s been trending up a little bit, but not that much.
But of course, this national average really hides the information that real estate investors want to know. We want to know what’s happening in my market, what is happening in my asset class. And we’re going to get into that right after this quick break. Stick with us.
Welcome back to On the Market. I’m Dave Meyer. Today, we’re going over a new motivated seller index that I found from Parcel Labs. Before the break, I broke down the index itself. It’s from zero to 10 and told you that in the United States on a national basis, it’s at 5.1. But let’s look at what’s happening regionally. Now, again, if you’re watching on YouTube, I’ll actually just scroll down and show you some of this and how this is ranked. But right now, the number one most motivated market in the country is Sherman, Texas, where we’re at a seven. So it’s really important if you go back and look at their categorization, anything above a seven and a half is fire selling. And so there’s really no markets in the country that are at fire sales status. And this sort of jives with what I’ve seen, at least anecdotally in the market.
Tell me in the comments if you’re wrong, but I’m not seeing fire sales. I’m seeing big discounts as an investor, which is great, but I’m not seeing people paying 70 cents on the dollar for things, at least on market deals. You don’t see that. And I think that’s good. As investors, we do want discounts. A buyer’s market is to the advantage of anyone who’s trying to acquire and to build, but you don’t want fire sales. The risk of catching a falling knife is higher in those situations. So Sherman, Texas is number one. Tampa, Florida is number two, also at seven. Punta Gorda at 6.9. Austin at 6.9. San Antonio at 6.9. So those are the high end. You’ll also notice here, it’s kind of cool. They have a breakdown between single families and condos. I don’t think a ton of investors invest in condos. I personally don’t, but it actually breaks it down.
So in Sherman, Texas, for example, single family index is a little bit higher. It’s 7.2, but for a condo, it’s lower, 6.4. That’s weird. I would’ve thought condos were higher, but right now people are holding onto their condos a little bit more, except in San Antonio. In San Antonio of a 7.3% for condo and single family. So hopefully you’re already seeing how useful this can be in your market, but let’s just talk about the other end of the spectrum, the least motivated markets. So we have Rochester, New York, crazy. I’m just still shocked at how strong Rochester was. I went to college there and the market was awful, but it’s been so strong for five years straight. Their motivated sellers index is at 1.7. So don’t try and negotiate if you’re going to Rochester, New York right now because people are not motivated. That’s a good, strong seller’s market still.
Lincoln, Nebraska at 2.3%. Hartford, Connecticut, we’ve talked about that market a lot so far this year at 2.5. Syracuse at 2.5. Another Western New York. And then Atlantic City is also at 2.5. So those are the total opposite end of the spectrum there. And again, we’ll put the link to this so you can look this up. I’m just going to pick a market. Denver, I’m about to list a property for sale in Denver and I am motivated. I’ll just tell you right now, not expecting to get the best price on that one. So let’s just see what’s going on in Denver. Denver right now, motivated, 6.4 and it’s climate. It’s actually down from where it was a year ago, but it’s been going up, and this sort of jives with my own motivation. I just think about, I’m putting this property for sale. I sold a very similar home, almost exactly the same, two blocks away in 2022.
And I got an amazing offer on that. And I was pretty firm on my terms. I did not really give up much in terms of an inspection objection. I’m selling this property. I’m going to be willing to work with a seller if I can get something, a buyer, if I can get something under contract. So this sort of jives with my situation. I’m selling a single family, 6.7. I’m not going to sell it if I can’t get a decent price, but I’m willing to give up a little price to get rid of this property. So you should definitely go check this out. If you are curious about how your market is performing, or if you are looking for a market to invest in, check this out. The URL is too long, so I’m not going to read it. Just click on the link in the show notes or in YouTube, we’ll put it in the description so you can check it out there.
But go look at your market. This is super, super valuable. And we’re going to talk more in a minute about how you can actually take action with this because the data’s interesting on its own, but there are deliberate things that you can be doing with your portfolio with this information. And we’re going to talk about that in a second, but I first just want to talk about institutional sellers for just a second. Because like I said, no market in total is fire sale status right now, but there are definitely individuals who are at fire sale status.That’s the best situation for you to find if you can get a good discount. But Parcel, I was digging through their data and they’ve been tracking institutional single family portfolios. And in some of these markets, these sellers are dumping a lot of listings, potentially dozens or hundreds. And so if you could find things like that, to me, that just seems like a dream scenario.
They’re probably good assets. Most of these institutional buyers don’t buy really old things, or if they have, they’ve probably fixed them up. So they’re probably in decent shape, don’t need a ton of CapEx and repairs. And they’re probably very motivated. Just think about the logistics to sell tons and tons of deals, potentially hundreds at a time. And these are in good markets. They’re in Dallas and Houston and Atlanta and Tampa. And if you’re wondering why they’re dumping them, these businesses work differently. They might be willing to sell and they’re going to re-up in a different market. They might be huge hedge funds and they want to allocate some money out of real estate. Maybe they’re not able to operate efficiently at the scale that they are at, but a small landlord who’s self-managing might be able to make this into a great deal. And so it’s hard to find these things, but talk to your agent and see if you can find these things.
There’s an example. There’s a company called First Key Homes. They have literally hundreds of active listings, and they are seeing the average cut running 20% off original asking price. And they’re cutting every 20 days. So if you can find something like that where these institutional sellers are trying to just get rid of deals, super interesting opportunity if you can find them. So talk to your agent, especially if you’re in one of these markets that are really hot or were hot a couple years ago, Phoenix, Atlanta, Dallas, San Antonio, the Southeast. These places, you might be able to find something. And this is kind of like what we’ve been talking about previously on the show about new construction. We’ve talked about how new construction, most builders, they’re motivated sellers right now. New construction, they want to get rid of that inventory. Similar to institutional investors, their business model does not allow them to be patient and to sit around and wait for deals to sell at the perfect price.
So think about taking advantage of that business model and being a solution to them because you can operate these deals better than they can. So that is one thing you can do in your own portfolio with this information. But I want to just talk a little bit more about once you’ve identified a market or you look at this information for your market, what you should do about it. We got to take a quick break though. We’ll be right back.
Welcome back to On the Market. I’m Dave Meyer. Today we’re talking about the Motivated Sellers Index, and I want to talk a little bit about how to use this information. So first up, I think the obvious thing here is using this to pick a market. Now, not everyone is looking for new markets all the time. If you’re new, maybe. But if you are looking for a market, this is pretty good information. I think as someone who invests in multiple markets, invests out of state, that this is kind of gold. Because the way I think about it and the thing I would do if I were you, is to combine data about fundamentals of the market with this information. Because if you can find a market that has motivated sellers, but has really good long-term fundamentals, that’s really valuable. Think about Austin or Nashville. They’re struggling right now.
Good markets. We don’t know when they’re going to recover. But if you can buy 10 or 15 or 20% below current asking price and comps, that gives you a lot of cushion. You are walking into equity even if the price goes down another 5%, which most markets are flat. They’re not even going down that much. So that is an amazing thing that you can do, is just go out and use this for market selection. The second thing that you can do is actually use this to identify specific properties. Now, full disclosure, this is a paid feature of Parcel. And I just want to say Parcel, they are not paying for this. This is not an advertisement. They did give me an account to check this out. They did not ask me to make this video. I am just making this video because I found it really interesting.
I just met them and they sent me all this data. I was like, wow, this is really cool. So this is a paid thing, but again, I am not being paid to say this. I am just choosing to say this because I think it’s really cool. In addition to looking at markets, which is free on their website, you can actually just go and download the active listings. I haven’t done this yet. So if you’re watching on YouTube, I’m doing this for the first time. I don’t even know what this is going to look like. So I’m going to download motivated seller properties. I think this is going to come. All right, it’s in a CSV. That was really quick. Okay. So in Denver itself, I can get exact property addresses, property type, like single family, condo, townhouse. It’s got all this information in here. Square footage, all the property features, bedrooms, bathrooms, new construction, purchase date, last price.
So I’m going to just scroll over here. They have all this cool information. And then you can see for, this is, I think it was like 17,000 listings. For 17,000 listings in Denver, I can get a score right here in this column you can see here, neutral, stubborn, neutral, stubborn. So I’m just going to go and see if I can filter this. Let’s just do this. Let’s filter this by, I’m going to see fire sale.
How many are there? There are 1,914 properties in Denver that are considered fire sale status. So again, you have to decide if this is worth the price for you, but this is an amazing way to target properties. And this is on market. These are on market deals that you can target using this information. So again, I don’t want to make this into a commercial for parcel, but this is really cool. I am pretty impressed by this. This is something I personally am going to probably start to use. So that’s the second thing you can do here is literally go and identify properties based on this index that they’ve created. So the first one was like picking markets. The second one was identifying properties. The third thing is really about making offers. Because like I said, I sort of teased this in the beginning, and we’ve talked about this with concessions before, but the more motivated the seller, the more aggressive you can be in your bid.
So that is either asking for discounts on price, that’s for asking for better terms, that’s asking for things like seller financing if they’re into that. That’s asking for concessions and rate buydowns and covering closing costs. And so knowing in your market alone, again, that’s the free thing. Knowing in your market alone how motivated people are relatively can help inform your bid strategy. If you’re in Chicago or Rochester, you’re probably not making super aggressive bids. But if you’re in Texas or Florida, you should be making super aggressive bids. You should be low balling, asking for tons of concessions. Absolutely. Now, those are the obvious examples for most of us. What’s going on in my market in terms of motivation for sellers is less obvious. So go look it up. That part’s free. And yeah, if you choose to pay for that, maybe you can target more motivated sellers.
But even if you don’t, talk to your agent. If you pick out a property that you like and you can tell that they’re motivated, you should be offering more aggressive. And this is a simple, you can go on Redfin and filter for price cuts or days on market. Go do both. Go filter for Redfin for price cuts and days on market. Then you don’t even need to pay for the parcel labs. I’m a spreadsheet guy, so I like that kind of thing. But you could go do that and look around on a map and find your own motivated sellers that way. So even if you don’t use the parcel data, use this information and try and assess for yourself how motivated people are in your market and how motivated individual sellers. So that’s my advice, the playbook for you. Now, before we go though, a couple of just things to watch out for because I just want to make sure, number one, just because a seller is motivated does not mean it’s a good deal.
Sometimes they’re sitting on market and their price cuts because that’s a bad deal. And there’s hair all over it. There’s structural problems, whatever. A deeply cut house can still be overpriced if it started at a crazy level. Even if they’ve cut it 20%, don’t just buy that. That’s your job. You can use data and your agent and everything to figure out which ones to target, but you got to make sure it’s still a good deal. Anchor it to real comps. Buy below real comps, not the size of the discount. That is something I see people making mistakes with these days. Oh, it’s 10% up. Well, maybe they listed it for 20% too high and it’s still 10% too high. So focus more on your own comps and your own underwriting than the size of the discount. Because remember, motivation can signal a problem. Knowing a seller is motivated means that they’re probably willing to talk.
That is not enough to make a deal work. You got to do the underwriting correctly. But I think this is super cool. I think it’s super fun information. It’s something I really got excited about. And you probably know this, but I look at all the data for the housing market. It’s pretty rare that I come across something new that I think is really useful. And I genuinely learned about this and wanted to share it with all of you. Use it if you want, but I think it’s really cool. Even if you don’t use this particular data, I think the mindset of going after these motivated sellers and adjusting your bid strategy and building your buy box around getting those deep cuts in the great stall, in the upside era that we’re in, that is a winning strategy. So hopefully this will help you in that effort.
So all right, that’s our show for today. Thank you guys so much for watching this episode of On the Market. I’m Dave Meyer. I’ll see you next time. Thank