In Andrew Shader’s time in the real estate development world, it quickly became apparent that buying property off-market can be a great way to find new and unexpected opportunities. If you happen to be an investor with a keen eye for how the real estate cycle works, buying an off-market property might even come with a discount!
Ultimately, it all comes down to an investor’s ability to find authentic value within any real estate cycle phase. Those on the hunt for off-market properties may end up saving significantly just by being the first to engage with a seller looking to cash out quickly in a period of recession.
When you understand the real estate cycle, buying property off-market is easier to navigate. Yes, there’s a certain amount of risk involved, but understanding the nuances of real estate phases and the benefits of off-market properties can lead to great rewards too.
What Are the Advantages of Off-Market Properties?
Off-market properties are for sale, but you won’t see them on any multiple-listing services. While they were once far less common, recent years have seen off-market properties become a secondary marketplace of their own in light of increased demand.
While the concept of secretive listing can seem counterintuitive at first, there are benefits to both buyers and sellers that you shouldn’t overlook. Moving outside of the traditional buy-and-sell norms can offer up some unique flexibility that draws many investors and sellers alike.
For some sellers, the appeal of an off-market listing is directly related to the opportunity to test the real estate waters without risking profits. They can see if buyers are interested without having to risk low-ball offers when a property is listed publicly for days at a time.
Because only one sales agent is involved in an off-market listing, sellers may also save on commission. Overall, it’s a more simplified sales process, so there’s room for commission negotiation that wouldn’t otherwise be possible.
For buyers, off-market properties offer some unique benefits in both standard market scenarios and during the expansion phase of the real estate cycle. Because sellers can work with lower agent commissions, they’re generally more open to negotiations with buyers, meaning potential savings overall.
During market phases with exceptionally high demand for homes, those who seek off-market properties can access options not available to the general public. This strategy is helpful whether you’re looking for a primary residence or strictly investment property.
How to Find Off-Market Properties
For all of the benefits that off-market properties provide buyers and sellers, it does take a little extra effort to access your options. Many buyers will first need to scope out a neighborhood they’re interested in. Then, they need to research the agents that work in that area to ask directly about off-market listings.
An online For Sale By Owner search is another popular method for accessing off-market properties. The most boots-on-the-ground approach is to simply go door-to-door and ask homeowners directly if they’re selling.
Significant Differences in the Purchasing Process
Do keep in mind that no matter what type of off-market property you’re looking for, you’ll be participating in a dual agency sale. In this scenario, the same agent represents both the buyer and the seller. Assume ahead of time that there may be a conflict of interest in commission versus sale price. Be prepared to handle those hurdles as they come.
About Andrew Shader
Andrew Shader is an entrepreneur and a successful real estate developer and investor in Fort Lauderdale, Florida. He got his Business Management and Marketing degree from Florida State University. After spending years in the insurance industry, Mr. Shader decided to shift his focus to real estate. Andrew specializes in value-added properties and boosting property value through investment.