I Bought a House That Wasn't on the Market. Here's Why I'd Never Do That Again

When I started the process of buying a house, there were few homes on the market in the area where I wanted to live. I also had some specific requirements for my house, which were hard to fulfill in my desired neighborhood.

Because there were no homes for sale that I wanted, I decided to take a creative approach and look into properties that weren't on the market. I found a home for rent, approached the owners, and asked them to sell it to me.

Ultimately, this led to buying my dream home. But, there were a lot of problems along the way that convinced me never to take this approach again. Here's what the issues were.

I had no negotiating leverage

The first big issue that I ran into when buying a home that wasn't for sale was that I pretty much had no negotiating leverage. The owners didn't need to sell as most people who list their house on the market do. So I had to make a competitive offer that would convince them to do so. And, when they came back and countered with a take-it-or-leave-it offer, I basically had to accept or they wouldn't have sold to me.

Fortunately, the amount they wanted me to pay was reasonable based on what other houses have sold for, and I would comfortably be able to afford the mortgage on the property, but I ended up paying more than I wanted -- and probably more than I would have paid if I'd been able to find a house that was on the market and negotiate the price down a little.

I also wasn't able to get them to drop the price when the appraisal came in a little low or when there was an unexpected issue during inspection, since they weren't in a position where it was really important to them that the deal go through.

The house wasn't for sale for good reasons

The other reason I wouldn't try this approach again is because there were good reasons the house wasn't for sale.

It turned out there were several liens on the home, and it took months for the sellers to get the liens cleared so they could sell the property. Liens are claims against the house, and a seller can't transfer full legal ownership until they are taken care of. Because of the issues with the liens, my home closing was delayed for more than three months. I was able to wait, but it still created a lot of hassle.

Ultimately, if you can't find a house that you want because of low inventory, getting creative and approaching people listing rental properties is one way you could find a place to buy. You could also try contacting people who have homes you're interested in and asking them to sell, or putting the word out in neighborhood groups that you're looking to purchase.

But, if you decide to move forward with trying to purchase a home that wasn't on the market to begin with, be aware that there are some serious downsides you may have to deal with. Like me, you could end up with a great house -- but only after going through a lot of extra hassle to get it.