Underutilized Properties as Seller Lead Signals
Identifying early signals for seller leads can provide agents and developers with a significant advantage. One such indicator is recognizing underutilized properties. Here’s why these properties present a valuable opportunity for real estate professionals:
Development Potential Exists: Many properties have untapped development capacity that their current owners may not utilize. This could be due to limited resources, lack of vision, or current market conditions.
Attractive to Developers: Properties with development potential are appealing to developers looking to maximize their investments. Expanding or enhancing these properties increases their market value.
Act Now with Ready Buyers: If there is a buyer ready to invest, it makes sense to engage with these opportunities early. This allows agents to facilitate deals before the market becomes competitive.
Premium Value for Development: Buyers interested in developing these properties are often willing to pay a premium over the current market value. This premium reflects the expected increase in property value after development, benefiting buyers and sellers.
Incentivizing Sellers: Sellers are more likely to sell their properties when approached by developers who recognize their long-term potential. Developers provide a strong incentive to sell, leading to faster transactions compared to buyers interested in the property as-is.
Shifting from Buyer Leads to Seller Leads
Traditionally, the real estate market has focused on buyer leads. However, recent changes, including the NAR lawsuits, have shifted the landscape. With buyers no longer requiring sellers to cover representation costs, representing buyers has become less attractive. This change makes seller leads increasingly essential. Under the new regulations, agents will prioritize representing sellers.
Case Study: Miami’s Underutilized Property Analysis
We are using Miami as a case study to refine our underutilized property algorithm and automated clustering. Our analysis shows that 72% of City of Miami properties are underutilized. This includes a variety of opportunities, from increasing the size of existing houses to initiating large-scale development projects.
Our algorithm evaluates properties to determine which ones can be expanded to at least twice their current size. We then group these properties by size and allowable uses, making the identification process more efficient.
For example, based on base zoning regulations, approximately 8,136 properties in Miami can accommodate more units than currently present on-site. This group represents 12% of the city’s total properties. Depending on the neighborhood and size of the future development, this number becomes more manageable, allowing for targeted outreach.
In my next post, I will explore the specific categories within Miami's Wynwood-Edgewater neighborhood.
