When investing in real estate, it is good to know where to look for the best deals. Market listings are not the only option for this. Unfortunately, most beginner investors do not know that off-market properties often have better offers.
What Is An Off-Market Property?
Off-market properties or pocket listings are properties up for sale but are not listed on the traditional MLS (Multiple Listing Services). These properties often have some advantages and are worth considering when looking for a property.
How to Find Off-Market Properties For Sale
1. Real Estate Agents
A real estate agent might be acting on behalf of sellers or buyers. Some sellers can contact realtors and top-selling real estate agents to get buyers for them without listing the property.
You can start by reaching out to top-selling real estate realtors or agents. If you are already in the process of working with an agent, and they trust you can close the deal, ask them if they have or can inquire about any pocket listings.
2. Contractors and Builders
These individuals usually work in close contact with the developer or the owner of the property. If the property is for sale, the builder or contractor might have an idea.
Even if the owner has not shared such information, you can talk to the builder, leave your information, and have them ask the owner if it is for sale.
This is the key to unlocking many doors, including real estate deals. It might be challenging at first, especially if you are not a social individual, but having contacts in the real estate niche might come in handy when looking for off-market properties.
You can start by attending any real estate events in your area, like openings, tours, expos, among others. You can also build networks through social media sites. Getting to know individuals with great connections within the industry could land you a great investment opportunity in the real estate industry. They might know off-market properties, and even if they are not interested, they can always pass that information to interested buyers.
4. Real Estate Wholesalers
Wholesalers acquire property selling contracts from sellers then assign that contract to a buyer at a higher price. Wholesalers always have information on off-market properties. Most of these properties are usually on discount, so wholesalers are good at scouting for such properties.
Keep in mind that a wholesaler is mostly a middleman, and you will most likely get a better deal when you work directly with the seller. Where possible, keep wholesalers as part of your network for future information on properties up for sale.
Real estate auctions are also a great place to scout for off-market properties for sale. It is easy to find such properties through auction sites in your area. When looking for auction properties, there are 2 main ones to watch out for:
- Foreclosures – these are properties where the owners could not meet their mortgage repayments, and the lenders repossess the properties. Ensure you confirm the state of the property because some of these could be rundown.
- Real Estate Owned Properties (REO) – lenders from unsuccessful foreclosure auctions mostly own these. Still, have an inspector check out the property before you sign off the deal. Lenders usually sell these properties ”as is” so ensure you can cater to any needed repairs.
6. Driving for Dollar
This is the real estate term for driving or walking around particular neighborhoods or areas of interest to look for properties. When doing this, keep an eye on distressed or vacant properties. Confirm whether the yard is tended or any form of mismanagement. List down addresses of properties that catch your attention.
Once you have your properties of interest, contact the owner, and find whether the property is up for sale plus its condition. With this, you can decide whether it is worth buying or not.
Advantages of Off-Market Properties
- Low competition – off-market properties have less competition than listed properties. With this, the competition race will not be tight, making it easy for one to score on the deal.
- Lower price – with lower competition, there is a likelihood that the cost of the property is lower than expected.
- Off-market properties offer an opportunity to score a unique deal. Some sellers only sell because they need quick cash or are moving and need to do it quietly.
- The negotiation process for off-market properties is smoother since both parties are relaxed and not dealing with multiple offers. As long as you have your contingencies in hand and are ready to understand the seller’s terms, the process will be less overwhelming than in the open market.
The bottom line is when looking for a property to buy, do not focus only on listed properties. Watch out for off-market properties. Start building your network, talk to realtors and agents, builders, constructors, and drive around your preferred neighborhoods.