Why does off market selling exist?

Question

Russell Brazil · Answer

Also while this isnt generally the market people on here are buying in, luxury listings...sometimes you can sell these for more off market than on.  You get a higher price because someone wants the exclusivity of buying something that was not available for the entire general public to buy.

Joe Horan · Answer

Some sellers just don't want to deal with the hassle of listing on the MLS. I just met with an elderly lady yesterday who has some health problems. Of course, she wants the most she can get for her house, but when it's explained that there are costs (closings and agent fees), inspections, potentially updating the property, showings, dealing with lenders, etc., it was quickly apparent to her that it's a lot of work.

Often, they just want to be done with it. Selling off market usually involves trading equity/money for an easier transaction and there are many people out there that will make the trade off.

Jonathan Streufert · Answer

Hey @Michael M.

The off market properties your agent is bringing you would result in less money lost to commissions for the seller, yes. When a house is sold through both a buyer's and seller's agent, commission goes to both of them. Some FSBOs will still agree to sell through a buyer's agent (and pay them commission) since the agent can take care of setting up the bulk of the paperwork so the seller doesn't have to.

One way or another, the reason off market properties exist is because the targeted buyer can provide something a random buyer with a buyer's agent can't. Maybe that something is a personal or professional relationship with the seller that would convince them to sell to that particular person. Perhaps the seller is in a dire situation and needs to sell NOW, and the buyer is offering to pay cash, pay all closing costs, and close quickly instead of waiting a month and a half for a mortgage to be approved. Or maybe the house isn't in the best condition and the seller doesn't want to go through the hassle of fixing/prettying it up, finding a seller's agent, waiting to find a buyer, waiting for the mortgage, etc (mentioned earlier in this thread).

Much of marketing involves contacting potential sellers and highlighting the benefits you can provide, and hoping you contact them at a point in which they are motivated to get rid of said property. You can't create motivation, but you can connect with a motivated seller and convince them through your message that you're the person they should sell to.

Mike Cumbie · Answer

Hi @Michael M.,

Often times it is the hassle like @Derek E. stated. Sometimes the owner just has an idea of what they want and investors trade properties like kids use to trade baseball cards. One is closer to their other ones, they want to own a whole street, they know the buyer. They have an idea of what they think it's worth and are just happy to get that. Terms are also a factor, quick sale etc. But in general if price is the only factor then yes get it in front of as many eyes as possible.

Irina Belkofer · Answer

Most people want to save on commission to agents. Besides, if the price is good for them and they have ready, willing and able buyer for their price - why not?

Jonathan Damon · Answer

Because the broker makes the most money out of the transaction.

Derrick E. · Answer

I am buying the house I have been renting. It was 100% off market. She said she was going to list it for sale, I asked how much.  She told me how much she was planning to list it for and how much she would sell it to me for. Shes older and its a great deal so I told her I would for sure buy it lol.

She didn't want to deal with the hassle which is why she was pricing it so low anyways.

Why does off market selling exist?

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