If you want to break into real estate or are looking to buy a new home, you may have heard of “buying an off-market property.” In this article, we will break down what this term actually means and how you can search for and buy off-market properties.
An “off-market property” is a property that is not publicly marketed for sale. Usually, when a property is for sale, it will be posted to multiple listing services (MLS) like Zillow. An off-market property is not listed here. An off-market property for sale may be advertised to a certain group of possible buyers or bought directly from negotiating with the seller without the property ever being advertised for sale.
It’s important to know that “pending” and “contingent” are not the same as an off-market property.
Properties are labeled “pending” when an offer is accepted and any contingencies have been taken care of. Properties that are pending are considered to no longer be active listings.
A property that is “contingent” means that a listing is active and liable to fall through because not all of the contract’s requested provisionals haven’t been met. If all the provisionals are met, the property will transition to pending status.
In the past, off-market listings were not very common. In recent years, with higher demand for housing, this has become more popular to sellers for a more private process and to negotiate lower commissions that have to be paid to real estate agents. An off-market property also does not have a tracked amount of days on the market, eliminating the lower offers for the length of time.
When looking for an off-market property, there is more access to homes that other buyers may not see. This lowers the number of prospective buyers, which can be high when the market is in demand. With off-market properties, your likelihood of buying and closing is more likely with access to this type of listing.
In recent market patterns, houses listed on the market sell extremely fast. With an off-market property, owners are usually not in a rush to sell. With this time advantage, you have the chance to fully look over and think about the property before submitting an offer.
Off-market properties typically have much more room to be flexible and relaxed about negotiations because time is no longer a factor. Off-market buying and selling tend to be easier, friendlier, and more flexible.
In most off-market situations, buyers have an upper hand. This usually leads to fewer conditions on contracts for the sale compared to market-listed properties. With fewer conditions, the buyer can usually get the best possible deal and reach fair negotiations.
If you are interested in selling your property but are not entirely certain yet, you can test the market by listing it as off-market. This means that you won’t have the pressure of how many days your property has been listed, which can lead to lower selling price points. You also will not have the stress of selling that can come with high-demand markets.
Sometimes listing your home publicly is not the most desirable option. This may be for a number of reasons such as divorce or money situations. By selling off-market, the process is much more discreet and allows you to have more control over who has access to viewings and access to your home information.
One of the most popular reasons to sell off the market relates to commissions. By selling off-market, you typically work with only one agent which means you can usually negotiate lower sales commission rates meaning you get a higher take from the final selling price.
The most common and easy way to find off-market properties is to contact your local real estate agencies. Realtors are not guaranteed to have a large range of off-market properties, but experienced agents can usually tap into their networks and have ways to find these properties.
Another way you can find off-market listings is on off-MLS marketplace websites. Sellers may list their properties on real estate auction websites, pocket listing websites, or other online services that allow advertising without being published on MLS.
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