What to do with off market properties?

Question

This question is geared towards other brokers/agents:

I find a lot of sellers that only want their properties sold off-market and they do not want to sign any listing agreement.... This can be frustrating because the risk of not getting compensated for your hard work and protecting yourself and your clients play a big role! What is some advice from others when dealing with these kinds of deals? take them or not? should I pursue buyers for these sellers or move on to another deal?

I don't mind taking these off market properties and not listing them publicly but I want to protect myself and my buyer/seller clients also....

Don Konipol · Answer

IMO, if you want to try brokering a transaction in which you have no legal representation of the seller, you should get a buyers broker agreement so that you represent the buyer.  Obviously, it needs to be stronger than the standard assumed Realtor's buyer representation agreement.  The agreement should stipulate that the buyer owes you a commission, which can be offset if the commission is collected from the seller.

After 35 years in real estate, I have found that the buyer and seller are often apart by exactly the amount of the commission.

Eric K. · Answer

Off market properties are something you keep in your back pocket.  You don't market them but if you come across a buyer who wants that kind of property then you present it to them with the others.

When an offer or contract is written you include your commission in the document.  Put it in the LOI.  If has the same effect as a listing agreement.

Account Closed · Answer

I broker off market commercial deals. All you need is an email or other quick proof that the buyer will pay you a commission, (the bigger the deal, the lower the  %).  Then go find a buyer.  Once you have an interested buyer, and before you bring the buyer to the seller, the seller has to sign a fee agreement.  If you find the buyer directly, I'd try to get the buyer to pay you something as well.  Remember, if you are being paid on both sides, you need to disclose it.

Off market deals are the best deals, and easiest to sell.   Many of my big buyers won't look at a deal if its on the market.

Will F. · Answer

Hello. I don't understand why a seller would want too sell off the market? I assume Off Market means not listed on data bases like MLS or loopnet?

Why wouldn't the seller want to market to as many possible buyers as possible when selling a property? How would a buyer even find an Off Market property?

Tim Davis · Answer

I am in FL - in these cases, I get a commission agreement with the seller - FAR has a nice one if you a Realtor - it basically states that "if I bring you a buyer in the next X months, and we complete a sale, you owe me X%"

It does not address price at all, just that if you bring a buyer, they will pay you. Sometimes I get this signed while holding the contract/LOI - "I have a contract for you, but I need this commission agreement signed." If they won't sign a single page document, they likely aren't real sellers, and just wasting your time. Without a commitment to a price (listing agreement) then why not agree to pay your fee? They can calculate their net proceeds from closing into their counter offer easily enough.

Wayne Brooks · Answer

It may depend on state law, but in Fl-a stated commission rate in a purchase agreement does not affect or alter an existing listing/commission agreement.  Also, I don't believe there is any legal obligation to the broker in this case, as the Broker is not a party to the contract, and the buyer/seller can agree to anything they want to.
Many commercial owners don't want a "public" listing.  I assume you are familiar with the "one client listing agreements".  I have modified these to include future clients, "registered" by email.  You get into nuances about excluded people the owner may have already talked to, etc. but it can be worked out.

Keith Wiggins · Answer

Thank you Eric, I will make sure I do that

What to do with off market properties?

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