What is an Off-Market Sale?
Selling off-market is generating buzz within the DC real estate industry. Some real estate agents are urging sellers to consider off-market sales – the process of listing homes without going public on an MLS (multiple listing system).
What’s an MLS?
When selling a home the conventional way, your real estate agent enters your property’s details into a multiple listing service, or MLS, a cooperative web platform and database that gives agents and their clients access to “the largest pool of properties for sale in the marketplace,” according to the National Association of Realtors (NAR).
What’s the Deal with Off-Market Listings?
Whether a seller is downsizing, upgrading, relocating, or just moving across the street, each scenario holds unique constrains for the seller, some logistical and some emotional.
Off-market sales have limited to no market competition, but competition in the marketplace is what drives price. So why would anyone want to list their home this way?
An off-market sale can be beneficial when a seller is seeking specific or unique contract terms. If a seller is less price sensitive, but is very sensitive to other terms of the contract, then an off-market sale might be ideal.
Some sellers need extra time to prepare to move, find a new home, clear out family memories, etc. Other sellers might be looking to sell a property as part of a group of properties being sold and need flexibility from a buyer. When these terms are crucial for a seller, off-market buyers can provide these, but usually want an advantageous sales price to afford flexibility in terms to the seller.
However, if not enough buyers know about the property, then they can’t express their interest, therefore artificially restricting demand. This is the main reason why selling off-market is not a good idea – it does not allow the property to reach its full market value.
The Benefits
Maintaining control, confidentiality, and privacy over your property. This discretion can appeal to high-end sellers as well as those with financial difficulties, or people in the midst of sensitive personal matters such as a divorce.
Avoiding the logistics of staging, showings, and open houses, which reduces the amount of traffic in your home as well as the stress of coordination.
Facilitating the sale faster. Some sellers opt for an off-market sale when the purchase of a new house is contingent on the sale of a previous house, or when they find their dream home through other means.
The Cons
Less publicity for your property. By not listing your home on the market, your home has less exposure to potential buyers. An agent has a network of agents and potential buyers, plus advertising through the MLS — and there are between 600 and 700 MLSs in the United States, according to Realtyna, a real estate technology company that maintains a comprehensive list of these services.
A potential discount in selling price. Caused by the limited number of potential buyers off-market, there’s less chance of a bidding war and the possibility that you won’t get someone who agrees to your asking price. “You might take a little less money than if you went on the open market,” Griffin says. “You’re looking for the ease of the process versus making a number. It’s time versus top dollar when it’s off market.”
In Conclusion…
Selecting the best selling strategy is key because choosing the wrong plan can cost the seller thousands. If you’re unsure about whether selling your home off-market is right for you, contact us for a free seller consultation.