By: Sally Grenier
Broker Owner, Grenier Real Estate
So what is an “off market” sale? Off-market properties are those that are not publicly listed for sale for one reason or another. It could be a “For Sale By Owner” (FSBO), or someone just wanting to sell their house to a family member, friend, or neighbor.
There are pro’s and con’s for both buyers and sellers when doing an Off Market sale.
Pro’s for Seller:
1. Seller doesn’t really have to clean, declutter or stage the home to get it ready for the public to view.
2. Seller can often negotiate with a REALTOR or an attorney to handle the transaction for a much lower rate than if he were to list the home traditionally with a Realtor in the MLS.
3. Seller doesn’t have to keep the house in pristine “showing condition” at all times in the event of a last minute showing, and doesn’t have to deal with the inconvenience of dozens showings or open houses.
4. If using a REALTOR as a Transaction Broker, he still gets virtually the same level of service as a traditional Listing Agent.
Con’s for Seller:
1. By not exposing the property to the entire buyer’s market, he could be leaving money on the table. In other words, if he had listed the property with a Listing Agent in the MLS, it’s possible he may have attracted multiple offers, and could have gotten a lot more than what he negotiated with the buyer off market.
2. By not listing in the MLS, he could also be missing out on a buyer with better terms and conditions. i.e. There could have been a cash buyer offering to buy the home “as-is” and could have waived the appraisal contingency.
3. By having a REALTOR act as a Transaction Broker, that agent can no longer advocate on behalf of the Seller. i.e. The broker cannot advise Seller that he should accept a higher offer and cannot advise on what inspection items seller should take care of.
Pro’s for Buyer:
1. Buyer doesn’t have to compete against other buyers or deal with bidding wars.
2. Buyer may be able to purchase the home for a much lower price than if it were exposed to the full market in the MLS.
3. By having a REALTOR act as a Transaction Broker, the Buyer virtually gets the same level of service as a traditional Buyer’s Agent.
Con’s for Buyer:
1. By having a REALTOR act as a Transaction Broker, that agent cannot advocate on behalf of the Buyer. i.e. The broker must remain neutral for both parties and cannot advise Buyer what he should offer and cannot advise on what inspection items Buyer should ask for.
2. If the Buyer hasn’t explored everything that’s on the market, he may be missing other opportunities.
How To Find Off Market Listings to Buy?
1. Ask your REALTOR! See if they have any “pocket listings” or if they may know any agents with any off market listings.
2. Direct mail — Ask your REALTOR to send letters to your desired area and see if anyone is interested in selling.
3. Foreclosures or “Pre-foreclosures” — Ask your REALTOR to search public records for homes that are in the early stages of foreclosure and have her contact those home owners directly.
4. Ask your REALTOR to contact FSBOs.
Generally speaking, doing an off market sale can make for a quick and easy sales process. Sellers aren’t dealing with the traditional listing process of staging, photography, marketing, showings, open houses, etc. And Buyers aren’t competing against multiple offers.
Money – For Sellers, if you’re flexible on price and don’t need to scrape every last penny out of the property, then this may be a good way to go. For Buyers, you could be getting a great deal!
If you’re in the market to buy or sell, do not hesitate to contact me!