There’s been a lot of talk lately about “off-market” listings (also referred to as “pocket listings”). You might be wondering how homes are being sold before they even show up online, without a “For Sale” sign or an open house, or you want to know how to get your hands on these opportunities. And if you’re a homebuyer who has been searching for a while and getting outbid, you might be thinking off-market listings could really change your home search strategy.
Once reserved for luxury properties and high-end clients who valued the utmost privacy, off-market sales are becoming more common even in the middle range of the real estate market. In fact, earlier this summer, I was able to help my clients purchase a home off-market, avoiding a bidding war with competing buyers and landing them their dream home.
First, let me clarify one thing, since I’m often asked what the difference is between on and off-market sales: generally speaking, the difference is that an “off-market” listing is a property that’s offered for sale but not posted on the MLS (multiple listing service), and therefore is not readily advertised to the general public. Rather, it’s advertised by word-of-mouth and distributed among the realtor community. Some off-market listings can also be advertised via social media, realtor or brokerage websites, and various other online tools, so more and more, we’re starting to see “off-market” listings being advertised to the public online, becoming more like “on market” homes that are sold “off MLS”.
In the majority of home sales, however, the home seller will place their home on the market (by hiring a licensed real estate broker to list it on the MLS) and allow the market to set the value of the property. In a seller’s market, they are likely to receive multiple offers, and may engage in rounds of counter offers, ultimately setting the highest price a buyer is willing and able to pay.
Alternatively, for a variety of reasons, a home seller might choose not to advertise their home to the public through the MLS. Such “off-market” sales tend to happen where the price is not the most important factor to the home seller. Perhaps they just want it sold fast and already have a price they want in mind. If they can identify a buyer willing to pay that price quickly and without having to incur added expenses in staging and preparing the home for sale, they might opt for an off-market sale.
The home seller might also choose to sell off-market for privacy reasons — they might not want their neighbors or coworkers to know they are selling and/or don’t want people traipsing through their house during open houses, especially if they are still living there. By selling off-market, they keep their home sale out of the public eye.
However, selling off-market is often not the ideal way to sell your home for the maximum price. The best way to sell your home for the best possible price is to maximize the number of buyers interested in your home, by maximizing exposure. In today’s technologically savvy world where the majority of home buyers find their next home online, this means placing the home on the MLS, ensuring it reaches all the buyers out there. And that is why the majority of home sellers place their home on the MLS, and why the majority of home buyers are most likely to find their next home “on market.”
Being open to exploring “off-market” homes should be a complementary part of any home buying strategy, but should not be the main focus for the majority of people. Unless, of course, you’re Beyonce… in which case, I completely understand the need for discretion! (Bey, if you’re out there looking for a home, call me.)