What's an Off-Market Sale?
Would it surprise you to know that there's more than one way to sell a house? (There is.)
However, for years we had been warning Sellers that selling "off-market" might leave money on the table. Why would anyone sell "off market" when high demand coupled with low inventory often led to HUGE overbids that, quite frankly, surprised the Realtors as much as they delighted the stunned Sellers. In fact, the market has been so bullish in favor of Sellers for the past SEVERAL years, that listing Agents often looked like magicians, or better yet, Super Heroes. (Thematic music please.)
"Off-market" sales are those wherein the homeowner seeks to sell without coming to market, thereby avoiding the costs of preparations, the anxiety of being on the market, and the unknown of what their property will ultimately fetch. Such sales are primarily for those who prioritize time, security, and ease of transition over money. (Yes, such people exist.)
In an "off-market" transaction, Sellers set a price they'd be willing to accept and ask their Realtor to beat the bushes to find a qualified Buyer. The caveat is that once a Buyer is procured and an offer has been ratified, there is no looking back, no second-guessing, and no regrets. In other words, it's a done deal.
Sometimes, the homeowners "sell now" price is pie-in-the-sky and simply doesn't reflect what the market will bear, in which case, no amount of beating, pruning, or shaping the bushes will bring forth an unrealistic expectation. While "off-market" opportunities don't come at a deep discount (indeed, they often come at a premium), there are few Buyers who will pay far more than the going rate just because the home seller believes their house is worth more. (If the "gift" is what you seek, we need to bring your house to market to create healthy competition.)
But if the Sellers set a price that's more in line with what the property would likely bring on the open market, there's a good chance we can find a willing and able Buyer who will jump at the chance. (Sarah and I have successfully sold more than a handful of properties this way, including the recent sales of both 1 Wyngaard and 236 Ramona Ave last month.) That being said, because the property will not be "market-tested," the Sellers won't actually know if someone would have paid more had the house been fully exposed. (BTW, the Buyer doesn't know if they could have paid less.)
Additionally, because "off-market" houses are often presented in a lived-in state rather than meticulously groomed, they don't necessarily invoke the same emotional hook that masterful staging creates, which is why Sellers are encouraged to invest in the costs of updating and freshening their homes prior to bringing them to market. As a rule, staged homes sell for significantly more than their unstaged counterparts - not always, but usually. (Note, if you update your house while you own it, you'll actually enjoy the benefits of the renovation while living there. Why wait?)
So what's changed?
Although it's early and we don't yet have enough data, the tide has definitely turned. Consequently, in a depreciating marketplace where Buyers have become tentative AND many have disappeared altogether, where inventory is on the rise, where a recession may be looming, where the stock market has lost billions, where interest rates have dramatically increased, and where we don't know what lies ahead, it follows that consumer confidence is WAY down. (No surprise.) Thus presenting an "off-market" buyer (aka the "ace in the hole") may be more reassuring to Sellers than rolling the dice should the property go to market.
With "Price Reductions," "Price Corrections" and "Adjusted Price" being the leading headline daily, it's no longer a guarantee that a property will receive multiple offers and fly off the market in a matter of days. Now that Buyers can feel a sea change, they're just as happy to wait and see if the prices will adjust further next week, next month, or next year. (They're not wrong.)
But before you decide to sell "off-market," it's important to understand that these transactions are not a walk in the park, primarily because of the second-guessing that permeates the deal from the get-go. The "off-market" sale ONLY works if both the Buyer and the Seller's needs are met and if both sides trust the process. If there's a moment of doubt or a second of hesitation, let's fully expose your house and see what the market delivers . . . that's the only way to be certain.
But if you still want to explore an "off-market" sale, we're here to discuss the pros and cons. With nearly 40 years of combined experience, our team is here to do what serves your end goals best.
How can we help you?
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Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.