The real estate business is one of the most competitive spaces in the country. Major changes can occur in just a few days and properties can be taken off the market in mere hours. This is especially common in large markets where demand exceeds supply. As a consequence of these market conditions, off market listings have become remarkably popular. But what exactly does selling your house off the market entail? Does selling off market benefit the property buyer or the seller? In this article, we will answer these questions and provide you with a comprehensive guide to off market listings.
What Are Off Market Listings?
Also known as pocket listings, off market listings are sales that occur outside the market. In other words, the listings are not advertised to the open market and the transaction happens privately between the buyer and the seller. This option becomes viable when the housing market is deemed too unbalanced. The two market conditions that prompt many homeowners and real estate investors to go the non-MLS listing route are the following:
- Rising markets: These are real estate markets that are characterized by low supply and excess demand. The fact that there are more active buyers than sellers results in bidding wars and price spikes. These markets favor the seller hence why they’re referred to as a seller’s market. Examples of rising markets include San Francisco and the Seattle housing market.
- Falling markets: On the opposite side of the spectrum, falling markets suffer from an excess of supply as the number of listings outnumbers active buyers. This is also known as a buyer’s market. A perfect example of this is the Chicago real estate market.
It might seem counter-intuitive, but both buyers and sellers can benefit from these two scenarios. In strong markets, selling a house off market saves sellers the hassle of managing a sales campaign in a highly competitive space. As for buyers, the private sale helps them secure an investment property without engaging in a bidding war.
In falling markets, sellers benefit by selling their properties for higher than market prices. From a real estate investor‘s perspective, these sales offer a tremendous opportunity to snap up the expensive prestige homes that are usually hard to find in flat markets.
Let’s take a closer look at some of the benefits of off market listings.
The Advantages of Off Market Listings for Sellers
- Taking your house off the market will help you avoid the possibility of your listing going stale. Buyers tend to be wary of properties that sit too long on the market.
- Pocket listings provide a discrete alternative for people facing a forced sale.
- Off market homes are easier to prepare since they get fewer showings and more serious buyers.
- Off market sales give you more control over the selling process.
The Advantages of Off Market Listings for Buyers
- You get access to interesting deals that are not available to the public.
- You will face less competition and no bidding wars for investment properties.
- Off market listings provide you with ample time to contemplate your decision.
- Pocket listings spare you the inconvenience of having to look at hundreds of thousands of options on the open market.
Now that you’re familiar with the advantages of off market listings, let’s explain how you can go about putting up a house for sale off market.
How to Sell a House Off Market
When it comes to selling a house off market, you generally have two options. The first is to use a real estate agent and the second is to handle the process yourself. Selling a property through an agent can be quite expensive whereas the second approach is substantially cheaper. Here are some house selling tips for those who would like to opt for the second option.
1- Take the Time to Understand the Market
It is imperative that you familiarize yourself with the local housing market before deciding to sell off market. You need to conduct a comprehensive real estate market analysis to figure out the current trends in the area. Talk to agents and other industry experts and try to get a sense of the level of demand in the market. This will give you a rough idea of the number of potential buyers that your property can attract.
2 – Assess the Value of Your Property
Determining the level of demand for your property should be followed by an accurate appraisal of its value. There are two ways you can do an appraisal. The best method is to hire a professional to assess the value of the home. The other option is to appraise it yourself. This requires gathering information on the property and looking at the average price per square foot of similar homes (real estate comps) to get a rough idea of what your own home is worth.
3 – Prepare the Property for Showings
Before listing the property, you need to make sure that it is ready to be shown to potential buyers. Your house’s ability to command a high price is directly correlated with the condition that it is kept in. The goal here is to leave a strong impression on buyers during showings. To ensure that everything is up to par, conduct an inspection of the property and figure out what fix-ups you need to make.
4- List the Property on Real Estate Websites
Posting your listing on real estate websites is the most effective way of marketing a house for sale. Moreover, this is the ideal option for those who don’t want to hire a real estate agent. Even though these websites mainly contain MLS properties, many of them offer you the option of listing your home as an off market property. A prime example of this is Mashvisor. As a matter of fact, homeowners and agents can list properties as “non-MLS” on the Mashvisor Property Marketplace.
The Bottom Line
As you can see, off market listings offer a lot of benefits to sellers and buyers alike. Having said that, you still need to make sure that selling an investment property off market is indeed the right option for you. Take the time to evaluate all the information you gather from the market and proceed only after you have understood the whole process.