I'd like to cast some light on the pros and cons of selling and buying off-market properties (i.e., homes not on the MLS — aka 'pocket listings'). It's been a hot topic as we're facilitating more off-market deals, particularly for sellers.
As rates rise and values stagnate, there's increasing opportunity for sellers, home buyers, and real estate investors to achieve their objectives through an off-market transaction.
So, why would you want to sell or buy off-market?
Let's take a brief look at both sides:
Selling off-market
Pros
• Privacy — no nosy neighbors or showings to strangers.
• Quick sale — potentially strong offering terms and pricing, including substantial cash, from buyers that want to avoid competition.
• Potential to sell direct to a principal and avoid the buy-side commission.
• Less prep required — sell 'as-is' and save time and money: avoid needing to make repairs, paint, modernize, stage, etc.
• If you're unsure it will sell quickly, you can start off-market to test demand and minimize the risk of a stale listing, i.e., high days on market (DOM) and consequently wary buyers.
• Opportunity to get a preview of what terms and concessions buyers are seeking.
Cons
• Smaller buyer pool and potentially lower price.
• You must be comfortable not knowing if you got the 'highest' possible value.
Considerations/tips
• Chart out your goals and motivations to ensure an off-market sale suits your situation and home.
• Work with a Realtor seasoned in off-market listings that has access to a pool of buyers with cash and knows how to handle this type of transaction.
Buying off-market
Pros
• Less competition for the property — opportunity to avoid a bidding war.
Cons
• Possibility of paying a premium to secure the property — make it worthwhile for the seller to keep it off the market.
• May have to accept the property as-is.
Considerations/tips
• Ensure you have a clear idea of your criteria (what you're looking for and need in a home or investment).
• Don't get caught up in a too-good-to-be-true opportunity — get it appraised and inspected.
• Work with an agent that is well-connected and has access to pocket listings.
• Be prepared to move quickly — have your financials and pre-approval/qualification ready, and bring as much cash as you're able.
Not sure which approach is the right fit for your goals and property?
Sit down with me over coffee, lunch, or over the phone to look at your situation and discuss how an off-market strategy could fit. -Henry