The Value of Buying and Selling “Off Market”

In real estate, the term 'off market' refers to a property or business that is for sale but is not listed on the Multiple Listing Service (MLS) or syndicated with other real estate listing platforms.?

As you can imagine, off-market real estate transactions present numerous advantages for both buyers and sellers. In this week’s article, we’ll unpack the many advantages and considerations for these off-market deals.

So, what does “off-market” even mean??

Instead of being marketed to the general public and placing the listing on the open market, these properties are shared through private networks via word-of-mouth, or directly to specific buyers or investors.

Essentially, you won’t see it on Zillow, LoopNet, or any of the major online marketplaces as the knowledge of these properties being publicly listed would affect their value and potentially the integrity of the sale.?

Brokers privately share these deals with their trusted buyers and broker partners who have a reputation for closing on the good opportunities presented to them.?

BENEFITS

Privacy: Sellers can maintain discretion regarding their property's sale, a valuable option for high-profile individuals or those with sensitive reasons for selling.

The fact that the a commercial property is being offered for sale could affect the property’s value and performance in the marketplace. Discreetness and privacy is of the upmost importance for sellers whose property values are affected by a invisible “For Sale” sign. People start to talk, and usually not in a good way, whether their opinions are justified or not.?

Exclusivity: Buyers gain access to properties not accessible to the general market, potentially uncovering unique investment opportunities or ideal matches without contending with other buyers.

This also gives buyers an opportunity to nurture relationships with the agent/wholesaler who has the deal. These relationships prove to be increasingly valuable to the growing investor. Their network compounds over time, and in a few years they will receive more and more deal flow (especially if the buyers provide feedback for when they pass on deals).

Negotiation: With fewer competing interests, sellers may have greater flexibility in negotiating terms, while buyers can exert more influence in securing favorable deals.

The best deals are negotiated off-market - period.?

Reduced Competition: Off-market properties attract fewer prospective buyers, leading to lower purchase prices.?

Price isn’t always the most important factor for sellers. It’s only one part of the equation. Find other ways you can enhance your offer without throwing money at it.?

Time Efficiency: Off-market transactions streamline the buying and selling process, bypassing the time-consuming procedures of listing, open houses, and numerous inquiries.

This proves to be the case with seller financing too, because the need for traditional loan approval process is eliminated.?

Access to Distressed Properties: Off-market deals often involve distressed properties or motivated sellers, offering opportunities for below-market purchases and potentially higher investment returns.

Relationships and Networking: Off-market transactions rely on personal connections and industry relationships, underscoring the value of cultivating networks within the real estate community to access exclusive opportunities.

CONSIDERATIONS

What’s the downside?

It's important to note that off-market transactions also have potential drawbacks, such as limited market exposure, difficulty in assessing fair market value, and the need for strong networking and industry connections to access these opportunities.?

Higher Risk/Higher Reward

In most cases, off market opportunities come with a lack of agent representation.?

Brokers/wholesalers offer great deals on a silver platter with all the pertinent information you need to make a buying decision, but it’s extremely common for the broker to represent the deal and act as a transaction broker instead of a buyer’s agent.

Wholesalers do not represent you - they are assigning the contract to you.??

Buyer beware.?

It’s the old, “high risk high reward” scenario. So you better know what you’re doing.?

And if you do, you’ll be handsomely rewarded for it.?

As always, Buyers and Sellers should carefully weigh the pros and cons before engaging in off-market transactions.?

BONUS?

Consulting with a real estate professional experienced in off-market deals (like myself) can help you navigate this nuanced process effectively.

Ready to buy your next investment property? Respond with your “buy box” so I can keep it in my notes.?

If you want to dive deeper, schedule a call with me here [https://calendly.com/abbadieaaron/introcall] for a free strategy session.

Let’s get you closer to your real estate goals.?

Stay Alpha,

Aaron Abbadie

Real Estate Advisor