Do you keep getting outbid on properties but hear there’s a magical, secret off-market market? In this video, I’m going to tell you everything you need to know about off-market properties. I’m also going to share the real estate industry’s dirty little secret that you’ve got to know.
A Magical Off-Market Market?
If you’ve been looking for a house for a long time but keep getting outbid, you’re likely frustrated. But then, you hear that you might be able to get a home by going to the off-market market. For example, a client was referred to me who believed there was one real estate brokerage that had a lock on all the listings here in the neighborhood. She felt like she’d be able to get a house faster if she worked with them because they must have access to a secret, magical market.
The perception that some agents push out that there’s some magical, behind-the-scenes, coming-soon market—or off-market market—is like a real-world example of clickbait. Is there an internal list? Of course there is, and every single brokerage has one. Most brokerages are going to have in-house properties and homes they know that are coming to market that aren’t ready yet. This allows the other agents to have a jumpstart on a new listing.
How many of those, though, actually sell off the market? That’s kind of a different story. Riddle me this: if you’re a seller and it was an incredibly insane seller’s market out there, would you agree to sell your house to a more restricted pool of buyers? Or would you want to put it on the market and open it up to everybody so that you could potentially have multiple bidders in a bidding war? You could have failed Economics 101 and you would still know the answer.
Never Say Never
Before the internet was a thing, there was something called a Big Book. This was what real estate agents had with all their listings (think giant phonebook). There were tough-talking, big-haired New York City real estate agents, who would sooner burn that book in the smoldering cigarettes in the ashtray on their desk than they would share it with anybody else. That was the value that they offered. They had information, including clients and listings.
However, I never want to say never. There are times when a property does transfer off-market, and this happens for one of two reasons. First, the seller might want a quick, low hassle sale and doesn’t feel compelled to try to gain the market or get multiple offers. Sellers sometimes have a price, and they don’t want to endorse showings and people in their homes. This is especially true in the age of COVID. Some people don’t even want anyone in their house.
If there was even a question of whether a home was going to sell or sit on the market, a seller might be willing to take a person’s off-market offer because they’re going to buy it at their price instead of going to market in a very uncertain time. They may not want to risk the chance that it doesn’t sell.
Convinced By An Agent
The other reason a property might sell off-market is that the agent convinced the seller to do so. I’ve seen off-market sales where I know for a fact that the seller could have gotten way more money had they taken their house to the public market. In 90-95% of the cases, it’s in the seller’s best interest to put their home on the market.
Do you know whose best interest it is to sell property off-market 100% of the time? You have to follow the money, and that leads you to the real estate agent. I’m not saying that agents convince clients to sell off-market because it’s in the agent’s self-interest, but integrity and ethics mean doing the right thing all the time even when it may not benefit you completely.
Regardless of all of this, there are a few basic things that I live by and run my business. They all come courtesy of my dad, Papa. He says no one can take an education away from you, you can never repair damage to your name and reputation, and loyalty and your word are everything. This all came into play when talking to that prospective client I mentioned.
A Real-Life Example
This person had an agent she had worked with in the past that she’d been very happy with but again, she was worried about this magical off-market market. She liked her agent very much but was trying to decide if she should work with me because I live in the neighborhood and I’m more aware.
She tried to find somebody from the brokerage that she thinks has more of a lock on the listings, but I told her no. I let her know that anyone who convinces you that there’s this magical off-market market is really in it for themselves, not for the best interests of their client.
That is the type of integrity that you want in an agent. You need someone who’s going to get you through one of the biggest purchases and transactions of your entire life. The prospective client agreed, and she ended up going back to the agent she had used time and time again. And you know what? She got a house within a few weeks. It didn’t hurt her in any way to not go with the other brokerage.
The Real Estate Industry’s Dirty Little Secret
The real estate agency has a dirty little secret—and I’m going to share it. You’re going to go to some brokerage’s websites and they are going to tell you that they’ve got off-market properties. If you register, they say, you’re going to get access to those. I’ve seen pages where they tell you you’re looking for 123 Main Street that’s no longer available, but they have 167 other properties that are not on the market yet that probably meet your criteria people.
This is nonsense. There are not 167 properties in any neighborhood or any 5 neighborhoods or any 10 neighborhoods right now that are for sale because the market is so constricted. Those 167 are likely out 60-80 miles, consisting of all the brokerage’s listings they have in a giant metropolitan area. Do not fall for this. You want to have an agent on your side that has integrity, who knows the market, and who can take you to all these different houses and tell you what’s happening.
They should also be able to tell you what’s coming, how to get something, and how to strategize to get it. This is better than trying to figure out how to get into some house that may or may not be available because the seller may decide that they don’t want to sell it off-market. That’s exactly what I can do for you. So if you have any questions about the magical off-market or anything else real estate-related, please hit and I’ll be happy to help.