Curious about off-market properties? Also known as “pocket listings,” these are homes for sale that aren’t available on the MLS (multiple listing service).
The MLS is a cooperative selling system operated by real estate boards and associations. Agents use it to share listings, and it’s where the vast majority of homes for sale can be found. So, what are the benefits—and potential drawbacks—of considering properties that aren’t listed there?
Whether you’re a buyer or seller, here’s what you should know about off-market properties…
Benefits for buyers
Are you interested in buying an off-market property? Here are the major benefits of doing so:
Access to more inventory
In many cases, more is better. Searching for a home is a great example. Of course, it’s possible to look at just a few properties and find the living space of your dreams. That said, there are times when you may want as many options as possible—especially when housing stock is limited. By opening yourself up to off-market properties, you’ll be increasing the pool of candidates for your ideal home.
It can mean less competition
In hot markets, demand often outstrips supply. As a result, buyers frequently have to compete for the limited number of homes on the market. By seeking off-market properties, you’re giving yourself the opportunity to view listings that most buyers aren’t seeing. If you make an offer on one of these homes, it’s highly unlikely that you’ll find yourself in a ten-way bidding war.
Where can you find off-market listings?
While adding off-market properties to your list of options may seem like a no-brainer, it’s often easier said than done. Fortunately, with a bit of effort, there’s a good chance that you can find and view pocket listings.
Common tactics include direct marketing (sending out postcards expressing your interest in buying), networking online (by using bulletin boards on Facebook, for example), and researching homes going up for auction (if you’re an investor looking for a potentially lucrative opportunity).
Of course, your best bet is always finding an agent who’s familiar with these types of properties. When you’re thinking about working with a particular professional, feel free to ask them whether they have helped buyers purchase off-market homes in the past.
Pros and cons for sellers
If you’re a seller, listing your home off-market may not seem intuitive. After all, you’re probably constantly hearing about how important it is to maximize your property’s exposure. That said, under the right circumstances, selling under the radar may be right for you.
The Pros
Are you thinking of selling your home off-market? Here are the major benefits of going this route:
You can keep it private
If you don’t want photos of your home’s interior to be widely publicized alongside your address and listing price, selling it off-market could be a solution. Many public figures (from celebrities to local politicians) choose this option. But the truth is, in the age of social media, general privacy concerns are mounting—and many homeowners who aren’t in the public eye are also choosing this path.
Less hassle
Choosing to limit your home’s exposure will mean fewer buyers—but as a rule, they’ll be more serious about purchasing than the average home hunter. That’s good news for those who don’t want to deal with showing after showing. You won’t have to worry about keeping your property in pristine condition (or navigating a stressful bidding war, for that matter).
You can test the market
If you choose to try listing your home for more than market value, there could be consequences. It may not receive any offers—and when buyers see that, there’s a good chance they’ll think there’s something wrong with your property. If you try this strategy and your home isn’t listed on the MLS, the fact that it’s not selling won’t be visible. You can later reduce your asking price and list it publically.
The Cons
Of course, selling a home off-market isn’t right for every seller. Here are some of the potential downsides to consider:
Fewer buyers
While some sellers may want to limit the number of buyers interested in their home, most want the largest possible pool of purchasers. For these homeowners, the time and effort involved in preparing a home and engaging in multiple showings is worthwhile. It means having their pick of buyers, as opposed to trusting that an impressive offer will be one of the few submitted.
Less chance of multiple offers
Fewer potential buyers means your home likely won’t inspire a bidding war. That works well for some sellers, but others will want to leverage their offers to maximize their sale price. If you’re okay with going through the negotiation process (with the guidance of a qualified real estate agent, of course), you’ll likely want to list your home on the MLS for maximum exposure.
When you’re considering whether to buy or sell off-market, speak to a qualified real estate agent. A local industry professional is in the best possible position to advise you on the buying or selling strategy that will work for you—and help you pave the way toward future success!
Looking for the right real estate company to meet your needs in Toronto? Come see what the agents at Harvey Kalles Real Estate have to offer!
