Off-Market Listings: What They Really Mean for Buyers

"Do you have any off-market homes?" It's one of the most common questions we hear from buyers, and from investors especially. It makes sense. An off-market home sounds like a secret deal. But as private listings become a bigger part of the market, buyers should understand what's really going on and how it affects them.

What off-market and private listings are

An off-market or private exclusive listing is a home that's for sale but isn't shared on the public websites buyers use. Only the listing agent, their office or one company's network knows about it. Some people call it a pocket listing.

That's different from a coming soon listing, which is visible to everyone before it's ready for showings, so every buyer can see it and plan for it.

Why investors love off-market deals

Investors ask me for off-market properties all the time. Why? Because they know less competition usually means a better price. Nobody has ever called me and said, "Mike, find me the homes with the most competition so I can bid against a bunch of other buyers."

So if you're a buyer and an agent tells you that you're one of only a few people who get to see a home, it can feel great. You might get a good deal. But here's the catch: that same system is keeping a lot of other homes away from you.

If an agent does offer you a private listing, ask a few questions before you get excited. Why is it private? How many other buyers have seen it? What have similar homes nearby sold for recently? A home isn't a deal just because it's off-market. It's only a deal if the price makes sense compared with everything else that's for sale.

The other side for everyday buyers

For one buyer who gets an inside look, there are a lot of buyers who never find out a home was for sale. If you're not working with the right agent or connected to the right network, those homes are invisible to you. Buying is already hard enough, and some of our buyers have been looking for a year. Finding out the home you wanted was sold privately before you ever had a chance is a tough pill.

That's one reason several of the largest real estate companies announced a shared listing initiative on October 26 that they say is meant to keep more homes visible to everyone.

Days on market is your leverage

One argument for private listings is that they hide days on market, which some say hurts sellers. For buyers, though, days on market is useful information. A home that's been for sale for a while may have more room to negotiate. A home that just came on may need a quick, strong offer.

If that information disappears, buyers lose part of their leverage. That's why I think buyers will keep using the websites that show it, and why hiding it doesn't help anyone in the long run.

Why more notice is better for buyers too

When homes go public with some notice, buyers win as well, especially when inventory is tight. Think about someone who works weekends, like a restaurant manager who works Friday, Saturday and Sunday. If a home goes active Friday and has multiple offers by Monday, that buyer never had a shot.

If they know a few days ahead that a home is coming, they can rearrange their schedule and see it Saturday morning. Public notice gives every buyer a fair chance.

How the rules are supposed to work

The National Association of Realtors' Clear Cooperation Policy says that once a listing broker markets a property to the public, through things like yard signs, websites, email blasts or social media, the listing has to be submitted to the MLS within one business day. The goal is to keep public marketing from turning into a private advantage.

There are exceptions, like office exclusives when a seller specifically doesn't want the home shared, so it's still smart to ask questions.

How to make sure you're not missing homes

• Work with an agent who watches the whole market, not just their own company's listings.
• Set up searches that include coming soon or pre-market statuses where your MLS allows it, so you see homes before they go active.
• Be ready to move. Get a fully documented pre-approval so you can act fast when the right home comes up.
• Ask about days on market and price history on any home you're serious about. It shapes a smart offer.

If you're buying in Northeast or Central Ohio and want an agent who will show you everything that's out there, schedule a time with me or someone on our team at 21mike.com.

Mike Ferrante
The Mike Team at LPT Realty
www.21mike.com
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