Have you often heard the term off-market but do not know what it means? Well, it is similar to normal selling of property but the only difference is there is no public advertising or marketing used to help promote the sale.
If you sell your property via auction or private sale, your real estate agents will use several ways to market the property, including online listings on sites which are used for property listings along with other advertising strategies like newspapers, posters, etc.
But in off-market property, there are no such real estate marketing campaigns, instead, the agent contacts the buyers directly from their database or from people who have gotten in touch for buying new properties with the same criteria’s.
How Do Off-market Work?
Off-market buying and selling involve a strong relationship with real estate agents who are serving in the relevant area.
If we see from the buyer’s perspective, seeking off-market homes involves close and proper contact with local agents to make sure that you get informed about the properties before they hit the market. And the agents whom you are contacting should have a clear picture of the type of home you are looking for along with your checklist of needs.
For example, you might be looking for a 3 BHK apartment with allotted parking. If you have prior knowledge of what off-market properties are out there, you can save your precious time spent on researching and visiting places.
And in case of off-market selling, the agent contacts the potential buyers from their database.
Why do people choose to sell their property off-market?
The off-market is mostly prevalent among the high-profile and high-value sales where the sellers do not want to advertise their property publicly. Here are some of the reasons for which people consider selling their property off-market.
Minimal void periods:
It is a known fact that empty property very quickly becomes an expensive property. In case you have tenants living in your property, then most selling agents would recommend serving notice to end the tenancy before marketing the property.
The reason behind this is that an empty property will show better and allow for a professional clean along with any other required maintenance before taking marketing photographs.
It also permits for viewing the property without causing any problem to tenants. The downside is that if the property fails to sell, the cost of the property will mount up quickly and the property owner will have to bear all the expenses.
Whereas in the case of off-market sales, you can send the property details to the potential buyers without giving notice period to the tenants.
If the buyer has no issues then the tenants can stay in the property until the sale completes. Thus in case of off-market selling the landlord can get relief from covering the cost during the lengthy void periods.
No selling cost:
Along with the cost voids, you also get relief from marketing cost.
If you want to sell a property on the open market, you will be needing professional photographers and floor plan along with a home report and printed sales schedules.
All these will cost you a huge sum of money and will take weeks to arrange and prepare the property, ultimately delaying the sale.
Whereas in off-market selling there is no need for any of the above marketing materials. All you need is just a few photographs taken with a professional camera, which can then be sent directly to the potential buyer via email.
A clear selling price:
In case of open-market, your property gets marketed as either “offers over” or “fixed price”, both of which provides the chances for variation in the actual price.
Although marketing your property as “offers over”, can push up the sales prices if multiple buyers are interested in your property. However, it doesn’t necessarily guarantee a high sales price.
Whereas if you have a particular price in mind, then off-market selling can be a good opportunity to achieve that. You are under no obligation to sell unless and until you are not happy with the offer, and you will still have your tenants.
A secure and quick sale:
If you go for an open-market the time for sell revolves around 2-4 weeks including the duration between advertising of the property and setting a closing date or accepting an offer.
Whereas in case of off-market selling your property details will get circulated among the warm buyers who are actively looking for a property to buy and are ready to move in as soon in as possible.
This approach of targeting a specific crowd saves the seller preparing the property for multiple viewings, thus minimizing the worry of the sale falling through.
How to find off-market real estate:
Off-market real estate deals offer several perks for investors. If you are also an investor and are looking for ways to find the off-market real estate market, then here are some of the best and proven ways which can help you identify off-market real estate for sale:
Direct mail marketing:
Direct mail marketing is one of the most efficient ways for off-market real estates. Once you have defined your targeted home seller, you can send out postcards or other ads showing interest to purchase their home.
Some of the homeowners do not realize that they are ready to sell their home unless they are presented with an attractive offer.
But before you implement this strategy, make sure to mind your due diligence. Make sure you have done proper research on the traits of your target audience. Try to get the best ad venues to reach your ideal customer. From postcards to yellow letters the options are endless.
Do not get disappointed if you do not get an instant response.
This is the most used strategy for lead generation in the real estate world and also applies for off-market properties.
No doubt networking is a time-consuming process, but with time and practice, it starts becoming easier to adapt.
For networking, you can visit the real estate events in your area or may even take the help of social media or bulletin boards to find interested groups. Additionally, you can also connect with your real estate connections to build your network.
Real estate agents:
Although real estate agents are more known with properties on the MLS, they can also be just as savvy in terms of off-market deals. To stay ahead in the market, it becomes essential to connect with a realtor who is familiar with the market you are interested in. Agents are often acquainted with the properties that are about to go on the market.
To pursue this strategy, the first step could be to make a list of the top agents in the market and reach to them either by phone or email asking for any off-market listings.
Additionally keep in mind that even if an agent cannot offer you help with your latest requirement, that doesn’t mean that they will be of no help in the future.
Always leave your contact information, so that they can reach you if need be.
Word of mouth:
Real estate is a business which deals with people. And the best way to reach a large group of people is the word of mouth. The more you employ word of mouth, the more people will think of you when they see an off-market property.
Benefits of buying off-market real estate:
Fly under the radar:
As off-market deals are not advertised publicly, they always stay out of the spotlight. This gives the buyers to get the property at great prices before they are ever listed for the public.
Can negotiate on the property:
In off-market deals both the buyer and seller are comfortable for negotiation as these properties are not seen by most people. This allows getting the contract at deals that would never be possible on the open market.
Some of the real estate listings can be due to unfortunate conditions of the seller. They may be going through a financial dilemma or may want to make a quick exit from the property.
In such situations, it is a win-win situation for both the buyer and seller and can offer attractive benefits giving good profit margins for investors. Moreover, you will have a competitive edge as these properties are not open to hundreds of competitive buyers. In the end, the decision of selling or buying your property on off-market is a personal choice depending on your reasons for selling or buying.
Selling on open-market might also work for some sellers who want to advertise their property publicly and maximize their sale prices. And in case of investors off-market real estate can provide wide profit margins.
Thus it is advisable to look into the benefits each method has to offer before making the final decision. Off-market selling can be faster, efficient and have less uncertainty avoiding many of the additional cost that comes with an open market.
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