Real estate inventory has remained tight in most markets across the country including Denver, CO and the trends aren’t changing. Therefore, you need to be ahead of the game as a potential homebuyer. You need to be aware of off-market listings which sometimes is referred to as pocket listings.
They are homes that might be on sale but are not listed on the Multiple Listing Service (MLS). This means that the real estate agents trying to sell such properties must always do the legwork to get a home buyer.
KEY TAKEAWAYS:
- Off-market in real estate refers to properties not publicly listed for sale.
- “Off-market” properties provide the seller with a level of exclusivity and privacy.
- Off-market does not mean sold
- They can be sold or considered for sale without widespread marketing, often appealing to buyers seeking unique opportunities.
- Buying off-market deals may offer competitive advantages, such as negotiating directly with the seller and potentially avoiding bidding wars.
- Access to off-market listings often relies on networking, real estate agents, or specialized platforms, expanding options beyond traditional listings.
Off market listings, also known as pocket listings, are yet another real estate term that needs to be clearly understood.
Listing homes off market was not that popular in the past but has gained considerable popularity in recent years. These listings have become part of a secondary market. Most buyers do not realize how often off-market property sales happen.
However, home sales not involving listing in the MLS mostly happen in areas where the real estate market is hot.
A report by the National Association of Realtors (NAR) in 2021 found that about 11% of sellers can find a buyer for a property without listing it on the MLS.
Luckily, MLS statement 8.0 did not spell the end of off market listings. The National Association of Realtors’ new policy has provided options that allow its member agents and brokers to have both limited and off market listings.
Another option of an “office exclusive” listing is available to homeowners who want to sell but maintain privacy. For an office-exclusive listing, the agent can share the listing with other agents in the same office or face to face with potential buyers.
Some other off market options were available to agents or brokers. A good example is “private listing networks,” which are not allowed by statement 8.0.
Other options, such as “coming soon” or “delayed showing,” are under local MLS’s control but have new restrictions that prevent realtors from sharing them with potential buyers.
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Does Off Market Mean Sold?
Off-market does not mean it’s sold.
Instead, off-market in real estate means a house isn’t listed publicly for sale.
It might have been listed and sold already. Perhaps the owner is considering selling but hasn’t put it up for sale officially. Perhaps it was listed, didn’t sell, and has now been withdrawn from the MLS.
Think of it like a secret deal—only a few people know about it, not everyone in the neighborhood. It can happen for various reasons, like privacy or testing the waters before a full sale.
Reasons Why a Property Owner Will Keep a Property Off Market
There are a couple of reasons that a seller may choose not to list their property. They include:
Seller’s Market
In case it is a seller’s market, the property owner or the seller’s agent may decide to hold onto the property and wait for a better offer. Some property markets can be so intense that agents and potential buyers directly contact homeowners with offers for their homes even when the owner is not ready to market the property.
A Foreclosure With Tenants
A house in the early stages of foreclosure may not be listed on the Multiple Listing Services if the seller has tenants and they do not want to alert them that the house is on the market.
Pocket Listing
The seller may contact a realtor to market the property privately, known as a pocket listing. In such a situation, the realtor will contact potential buyers directly with the listing or share the pocket listing with a small group of fellow realtors.
Pocket listings are common for unique properties that perhaps are highly desirable like a Downtown Denver home with a detached accessory dwelling unit (DADU).
Unavailable to Show
All MLS listings must be available to show. If the property owner is not available for showings, they may decide to temporarily take the house off the market. If this happens, the listing agent will change the status of the property to “temporarily off-market.”
Avoid Commissions
Real estate commissions are soaring along with house prices. Savvy sellers are looking for ways to reduce the cost to sell and avoiding commissions is one such way. Keeping a property off-market gives the seller leverage to negotiate how much an agent is paid because contracts are not set in stone at this point including listing contracts and the CDA.
Coming Soon
Sometimes you might come across properties listed as “coming soon” on the MLS; this means the seller is trying to test the market and gauge potential buyer interest before the property is listed.
Avoiding “Days on the Market”
A seller might be worried about their property going stale or having it in the market for a long time while people wonder what is wrong with it. This applies to high-end homes requiring more time to sell, even if the local real estate market is fast-paced.
Can I Sell My House Off Market in Colorado?
Yes, you can sell your house off market in Colorado. It means you don’t list it publicly for sale, but you can still find buyers through private networks, and real estate agents, or sell your house to a trusted home buyer like our company, “We Buy Houses In Denver”.
As a home buying company we have purchased many properties directly from owners in Denver and across Colorado proving our ability to close off market deals in a fast and efficient fashion.
How to Locate Off Market Properties
Contact Local Agents
The best and easiest way to locate off market homes is by contacting local real estate agents. The agents will most likely know what is about to come back on market (BOM) or have clients who have chosen off market listings. A well-connected agent will provide information about the neighborhood and the properties to watch.
Off Market Listing Services
The real estate auction websites and pocket listing services help sellers to advertise properties not published by MLS. You can sign up to get email notifications whenever there is a new off market property.
Alternative Listings
Foreclosures, bank-owned homes, and short sales are all off market properties. They can be found on bank websites, real estate auctions, or in newspapers. Remember that these properties are normally sold as is, so you must research before making a cash offer at the auction.
Public Records
If you are capable and willing to do some legwork, you can check the public records for expired listings. You might be able to make a real estate deal with the seller.
Alternatively, you may be able to automate this search by implementing RPA which could crawl publicly available county records and home sales for you and report on the relevant findings.
Search Engine Optimization
As a Denver house buyer I am always on the hunt for off market houses. Over the years I have bought a number of houses that were not listed on the MLS.
Do you want to know how I found them?
I spend the majority of every day trying to get in touch with people needing to sell their homes quickly and wants a cash sale. I do this using white hat search engine optimization techniques.
I use SEO to try and rank the website for my home buying business at the top of search engine results. This is an extremely difficult process but does yield some really good deals if you are consistent and patient.
Benefits of Buying Off Market
The owners of off-market homes are normally more relaxed and can afford to give a real estate investor or cash home buyer time to take a good look at the investment property before making an offer. You will not be competing with other buyers to make an offer.
There is a possibility of getting a unique market deal. This is because they do not want a bidding war unless a seller is under contract with a local real estate agent to market their home as a pocket listing.
Their major concern might be privacy; they will try to offload the house quietly. In such cases, you can get a good deal.
As a buyer, including off market listings in your search will make the housing market bigger and increase your chances of getting a suitable house. If you are in a hot real estate market, other buyers will be your competition.
Looking for off market properties will increase the inventory you can work with while excluding your competitors, which is especially true in Denver’s extremely tight housing market.
Off market deals are normally smoother and a bit more flexible since there is no time pressure. Fewer buyers are aware of the property, meaning the seller cannot afford to put up restrictions on the sale, which translates to an advantage for the buyer, especially if the property is distressed.
Disadvantages of Buying Off Market
It may take a longer time to close. Additional time might benefit the seller, but if you are in a hurry to close as a buyer, this might be a disadvantage since the seller is not pressured to move fast like a listed property.
Another thing is finding off market deals is not easy and may take a longer time and more labor than using the MLS.
It may be difficult to determine fair home prices. When a real estate property is listed on the MLS, it becomes easy to compare comps, price per square foot, and other property details since they are all on one page.
It is not easy to develop a fair market value for properties only available to a few buyers. You will be forced to do real estate market analysis by yourself. The pocket listing services and off-listing markets may require some membership fees.
Off market real estate deals have advantages you cannot get when you buy on the open market. They will provide you with endless investment opportunities if you can locate them.
It is important to acquire knowledge on how to find off market real estate, especially if you are interested in introducing new investment properties into your portfolio.
In most parts of the country, the real estate market is still hot, so there is more demand and less inventory.
Some buyers have lost bidding wars and lost out on getting the property they wanted. Such buyers will appreciate any advantage they can get, and looking for off market properties offers such an advantage.
