You may have heard about buying or selling a home ‘off-market,’ but what does that actually mean? An off-market home is a property that is for sale but not made available to the general public through the multiple listing services (MLS). It may also be referred to as a “pocket listing”. As such, the real estate agent must do extra legwork marketing a home to potential buyers. This type of sale can be perceived as more ‘exclusive’ however is it right for you? Let’s look at some pros and cons to listing and selling off market, as well as some new guidelines set forth by the National Association of Realtors (NAR).
There are a handful of reasons a seller may opt for an off-market sale. Sometimes a seller wants to test the value of their home without accumulating excessive days on market and the potential of lowball offers. Others simply prefer a private sales process or feel they can maintain more control through an off-market sale.
Pro - Seller:
Selling a home off-market offers more privacy. Homeowners who are living in their homes can avoid intrusion of open house foot traffic through personal space and posting photos of their home on the internet. Additionally, in a low inventory market some sellers feel that an off-market listing will be perceived as more ‘exclusive’. They hope that buyers are willing to pay a premium to avoid competing with other potential buyers.
Con - Seller:
Less exposure to the public means less exposure to buyers. Interest creates competition therefore, a home that can be marketed to generate as much interest as possible is more likely to sell for the highest possible price. You’ll never know if you’ve left money on the table.
Pro - Buyer:
Off-market listings provide additional inventory to buyers. The major advantage is less competition. A trade-off is that typically, the list price is firm and less negotiable. It is always a good idea to have your agent review recent sales comps for the home to support the price.
Con - Buyer:
You will never know if you paid too much or too little. This may be fine for you depending on your situation. Remember that if you are getting a loan, the house will need to appraise for the loan to be approved. With any home purchase it is important to be in close communication with your lender!
MLS Statement 8.0 Clear Cooperation Policy
In an effort to curb this secondary market, NAR has enacted the MLS Statement 8.0 Clear Cooperation Policy as of January 2020. This policy aims to create a more equitable market for all buyers. It states:
This limits an agent's ability to market an off-market property outside of his/her office. It does not apply to commercial properties, rental properties or new construction with multi units. Exemptions are allowed if a seller wants to keep the listing private as an office exclusive listing. In this case, the marketing can not be passed outside the office of the listing agent. At this time, we have yet to see how this will impact sales in our Bay Area market.
Is buying or selling off-market right for you? You now know the advantages and disadvantages that are involved and what it really comes down to is what best suits you and your housing needs. When working with an experienced local agent, you are exposing yourself to their vast agent network where off-market opportunities will undoubtedly present themselves. To receive the off-market properties in your area, contact me directly. I look forward to working with you.
By Lindsey Mathews
IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.