Agents who uncover unexpected seller opportunities often win more listings. At The Share Group, we help real estate pros and investors tap into fresh seller lead sources that go beyond the usual expireds and absentee owners.
Here are three high-potential lead types that most agents aren’t targeting—but should be.
Who They Are: These are households with children living in homes under 2,000 sq. ft. who have owned for more than 3 years--and have 1 Bathroom! In high-cost states like California, many families bought a starter home a few years ago and are now literally bursting at the seams.
Why They’re Motivated to Sell: After a few years of child-rearing (or even adding another child), a sub-2,000 sq. ft. home can start to feel tight. Perhaps they converted the dining room into a home office or the garage into a playroom – either way, space is at a premium. California’s sky-high home prices often force families to “buy small” initially; as their kids grow or remote work becomes the norm, the need for more space becomes pressing.
Overcrowding is a real issue – California has the nation’s highest rate of overcrowded homes (12.9% of residents live in tight quarters) lendingtree.com, and Los Angeles alone has ~270,000 households deemed overcrowded (about 17% of renters) laist.com. While not all of these owners meet our exact criteria, the data underscores how many families feel squeezed in their current homes.
How Agents Can Help: Position yourself as the go-to resource for “move-up” buyers. These clients likely have substantial equity after 3+ years of ownership (especially given recent home appreciation) and may be ready to convert that equity into a larger home. You can:
Highlight Upgrade Opportunities: Show them what their budget can buy in terms of a bigger house, perhaps in a less expensive nearby area. Provide a free market analysis of their current home’s value and a list of larger homes in their price range.
Address Their Hesitations: One hesitation may be trading a low mortgage rate for a higher one on a new purchase. Be prepared with creative solutions – e.g. buy-down programs, negotiating a longer closing to sell high then buy when rates dip, or even new construction deals where builders offer rate incentives.
Leverage Their Equity: Remind them that, in California, home prices have risen significantly in the past few years. (For example, the average home size in California is around 1,625 sq. ft. bobvila.com, smaller than in many states – Colorado’s average is ~2,126 sq. ft. bobvila.com – meaning Californians often pay more for less space.) If they’ve owned for 3-5 years, they likely gained equity they can roll into a bigger property.
Market Trends: Family-sized housing is in short supply in many California markets. Millennials who started families during the pandemic may have outgrown their space. A 2023 survey found 51% of young Californians (ages 18–34) have considered moving to a cheaper area due to housing costs laist.com, often in search of larger, more affordable homes. We also know the average new U.S. home is about 2,500 sq. ft. bobvila.com, much bigger than what many Californians have. This gap suggests a strong desire among California families to “catch up” on square footage if they can. The moment their financial situation or the market allows, many will be ready to sell and upgrade.
Geographic Hotspots: As the nickname suggests, “Cramped in California” leads are concentrated in California – especially expensive metros with smaller homes. Think Los Angeles and Orange County (where many post-war homes are <1,800 sq. ft.), the Bay Area (where high prices often mean families squeeze into townhomes or condos), and San Diego. That said, you might find similar “cramped family” situations in other pricey, land-constrained markets like New York City (outer boroughs) or Honolulu – but California is ground zero.
Within California, target family-friendly suburbs where entry-level homes are relatively small. For instance, areas of Southern California with older housing stock (and good schools) are ripe for this: parts of the San Fernando Valley, Orange County’s starter neighborhoods, or San Diego’s urban neighborhoods. The Share Group can even filter lead lists by criteria like home size, length of ownership, children present (using demographic overlays), and location – making it easy to pinpoint these prospects.
Here’s the catch: California has the smallest average home size in the U.S. at 1,625 sq. ft., while having one of the highest household sizes at 2.86 people per home (U.S. Census, Rocket Homes).
Compare that to Texas (2,117 sq. ft.) or Colorado (2,126 sq. ft.), where families enjoy more elbow room.
These homeowners likely have significant equity and may be motivated to sell if shown what their buying power looks like in the current market.
🔑 Agent angle: Position yourself as a move-up specialist. Offer to compare their current home's value with larger properties in nearby, more affordable areas. This group may be reluctant to give up their low mortgage rate, so be ready with creative financing ideas (e.g. rate buydowns or bridge loans).
👉 Pro move: The Share Group can help you pull targeted lists of families in California living in <2,000 sq. ft. homes, who’ve owned for 3–10 years and are likely ready for more space.
Who They Are: These are property owners who owe more on their mortgage than the current market value of the home – often called “underwater” or negative equity homeowners. While home values have generally risen in recent years, certain pockets of the country and recent buyers are now facing declining values. According to the latest data, about 1.1 million U.S. homes (roughly 2% of mortgaged properties) were underwater as of Q4 2024calculatedriskblog.com, and that number has been ticking up as the market cools in some areas.
Why They’re Motivated to Sell: Negative equity can be a painful trap, especially if the owner needs to move for other reasons (job change, expanding family, etc.) or is struggling with payments. These homeowners often bought at the peak of the market or with minimal down payments. Now they’re facing a situation where if they try to sell, the sale price won’t cover their loan balance.
Many feel stuck – they can’t easily refinance (no equity) and can’t move without bringing cash to closing. If life circumstances force their hand, they might opt for a short sale or need to sell to avoid foreclosure. In a softer market, some underwater owners may proactively sell now to cut their losses, rather than risk falling further behind.
The key motivator here is financial stress or uncertainty: owing more than the home is worth makes people nervous, and any sign of further price declines or personal financial strain (like rising adjustable mortgage payments or job loss) could push them to sell.
Importantly, even though negative equity is not as widespread today as it was in the aftermath of 2008, the trend is upward. Nationwide, the share of seriously underwater mortgages rose from 2.6% to 2.7% in early 2024 foxbusiness.com, and 37 states saw increases in underwater rates that quarter foxbusiness.com.
In other words, this is a re-emerging issue. And remember the history: after the 2008 housing crash, roughly one in four mortgaged homes in America was underwater axios.com. We’re nowhere near that level now (thankfully), but if the economy or job market falters, today’s 2-3% could grow.
Negative equity homeowners know this – they remember the last crash or have heard the horror stories – so many are motivated to sell sooner rather than later if they sense trouble on the horizon.
How Agents Can Position Themselves: Helping an underwater homeowner requires tact and expertise. You’re not just a listing agent; you may need to be part real estate advisor, part counselor, and part negotiator. Here’s how you can add value:
Expert Guidance on Solutions: Educate the homeowner on their options. This might include a short sale (selling for less than owed, with lender approval), loan modification or forbearance (if they want to keep the home), or bringing cash to close if they have other resources. Many negative-equity owners don’t realize banks will often work with them on a short sale to avoid a costly foreclosure. If you have experience or certification in short sales and foreclosures (e.g., SFR designation), highlight that expertise.
Negotiation with Lenders: Offer to handle the tough conversations with the bank. As an agent, you can coordinate the short sale paperwork or liaise with loss mitigation departments. This is a huge relief for stressed sellers. Emphasize that you have the know-how to navigate bank requirements, market the property, and get it sold for the best possible price in a tough situation.
Investor Connections: Often, underwater homes might need some TLC or are in markets with more investors than traditional buyers. Position yourself as having a network of investors who are interested in “distressed” properties. Sometimes an investor buyer willing to pay cash (possibly at a slight discount) is the quickest way out for an underwater owner – especially if the alternative is foreclosure. If you work with any iBuyers or investor clients, mention that you can get quick offers, which might persuade a hesitant underwater owner that selling is feasible.
Empathy and Confidentiality: These homeowners may feel embarrassed or desperate. By marketing yourself as a confidential consultant who understands underwater scenarios, you build trust. For example, your prospecting message might be: “Upside down on your mortgage? You’re not alone, and you have options. I specialize in helping homeowners in tough situations find solutions discreetly.”
Market Trends: Negative equity tends to be concentrated in specific regions and price segments. Recent data shows it’s most prevalent in parts of the South and Midwest axios.com. Why? Many of those markets saw only modest home price gains or even declines since 2022.
For instance, Louisiana has the highest rate of underwater mortgages at 11.3% axios.com (as of Q1 2024), after home values in some Louisiana markets fell ~6% from their mid-2022 peak. Wyoming is another hotspot – its underwater share jumped to 8.8%, following a ~12% drop in home values after June 2023. Other states with above-average negative equity rates include Mississippi, Kentucky, West Virginia, and Arkansas, often in the 5–8% range of mortgages. By contrast, many Western states that saw huge price run-ups (California, Utah, etc.) still have very low underwater rates (California’s is around only 1.2% foxbusiness.com).
This means the opportunity is very targeted: you’re looking at soft markets – places where prices have dipped or stagnated in the past year or two.
Why it matters: Roughly 1.1 million U.S. homes were underwater as of late 2024, according to ATTOM’s Q4 2024 Equity Report. Most agents assume this is a 2008-era problem, but it’s creeping back—especially in softening Midwest and Southern markets.
Some key hot spots:
Baton Rouge, LA – 13.4% underwater
New Orleans, LA – 7.3%
Jackson, MS – 6.5%
Little Rock, AR – 6.0%
📉 Why they sell: These owners may be facing job changes, financial strain, or rate resets on ARM loans. Selling might be their only path out—even if it’s a short sale.
🔑 Agent angle: Be the empathetic expert. Help navigate options like short sales, connect them to investor buyers, or market the home creatively to offset losses. You’ll need to be confident, discreet, and solution-oriented.
👉 Pro move: Ask The Share Group for data on likely underwater homeowners in specific ZIPs. We can help you locate high loan-to-value property owners where prices have dropped or stagnated.
Who they are: STR (Short Term Rentals) are non-local owners of vacation homes or Airbnbs in areas where short-term rental demand has dropped.
Why it matters: During the pandemic, many bought second homes banking on steady Airbnb income. But by 2024, oversupply and shifting travel trends left many owners in the red.
According to AirDNA, over 60% of active Airbnb listings were added post-2020, crowding once-lucrative markets. In many popular areas, occupancy has dropped below 40%.
📉 Markets to watch:
Big Bear Lake, CA – 32% occupancy
Atlantic City, NJ – 34.6%
Lake of the Ozarks, MO – 35%
Sun Valley, ID – 36%
These absentee owners often live hours away and are tired of juggling cleaning, vacancy gaps, and new regulations.
🔑 Agent angle: Offer a smooth exit. Provide a CMA, estimate net proceeds, and highlight your local expertise. Many of these owners just want out—they’re no longer emotionally invested.
👉 Pro move: Ask The Share Group for a list of absentee owners in depressed STR markets. We can segment by location, property type, ownership tenure, and mailing address state—so you know exactly who’s likely to sell.
These three lead types—Cramped Families, Underwater Owners, and STR Burnouts—all have one thing in common: they’re overlooked by most agents.
But they’re motivated, they’re niche, and they’re findable—if you know where to look.
At The Share Group, we specialize in delivering high-quality seller leads tailored to your strategy, market, and goals. Whether you’re farming move-up buyers or tapping into distressed vacation rentals, we’ve got the data to help you connect.
🎯 Ready to find your next listing?
👉 Request a custom lead list today and start working smarter—not just harder.