Selling Your House Off-Market: Is It the Right Choice for You?
When most people think about selling their home, they automatically assume it needs to go on the “open market”. This act may reluctantly be followed by sinking money into repairs and updates in hope that a random open house attendee will make a reasonable offer for their property. But does this formula work for every home or every unique seller’s situation? Obviously not. That’s why it's important for sellers to be aware of all of their alternatives, including the possibility of selling their home through a less traditional, off-market approach.
In this article we will explain what selling “off-market” means, and then explore both the challenges and the advantages this tactic presents. A recent off-market sale in the East Bay serves as a compelling case study and illustration of how this approach yielded wildly successful results for our client given their unique set of needs and circumstances.
Understanding Off-Market Home Sales: A Discreet Selling Solution
An off-market home sale refers to the process of selling a property without advertising it publicly on the open market or MLS (Multiple Listing Service).
Off-market sales are typically achieved through discreet, direct conversations by real estate agents who utilize their professional network to identify the best suited and most highly motivated subset of buyers. While this targeted buyer pool is unquestionably smaller than what a full on-market advertisement of a property would attract, there are instances in which this less popular alternative may be more advantageous for a particular type of seller.
So why, or when, should a seller consider trying to sell off-market? Possible reasons or motivations typically include a seller wishing to limit the volume or timeframe in which their home is made available for buyer viewings, minimizing or avoiding the expense or effort involved with “prepping” the property to more picture-perfect standards, and privacy concerns or an aversion to mass marketing, lawn signs and other social/print advertisements.
Let’s compare the potential benefits of both the traditional, on-market, and alternative, off-market, approach to selling your home.
Benefits of Selling On-Market:
Wider buyer reach: Listing your property on the open market will attract a larger pool of potential buyers actively searching for a new home
Market testing: You gain feedback and insights into market demand and the perceived value of your property through open houses and advertisements
Multiple offers and competitive bidding: Mass exposure can create competition among buyers, potentially leading to a bidding war yielding a higher sale price
Tax advantages: Expenses (i.e. upgrades, repairs, etc.) incurred in preparing your home for sale can be eligible for offsetting capital gains taxes
Benefits of Selling Off-Market:
Privacy and control: Seller commands an increased level of privacy and control over the marketing and sales process, including timing and transaction terms
Targeted buyer pool: Limited exposure to “serious” pre-qualified buyers, agents and contractors/developers/flippers can generate offers quickly
Cost savings: Sellers typically avoid expenses related to remodeling, staging, and professional photography and elect to sell the home in an “as is” condition
Favorable negotiation: Off-market sales often lead to more concessions favoring the seller, enabling negotiations that align with their unique needs
Keep your options open: The option to "go to market" remains viable if the seller's objectives are not achieved off-market. A seller can test out market demand and buyer's perception of value all at zero days on market!
Often the success of an off-market sale relies heavily on the capability of the seller’s chosen listing agent. Having a sufficient audience of pre-identified buyer prospects and strong negotiation skills are critical parts to the deal. Read on to learn more about how our expertise in applying this approach recently achieved outstanding off-market sales results for a client in need of selling their home.
Case Study: A Successful Off-Market Home Sale
This case study is an amazing example of a successful off-market home sale led by Connect California Homes.
The Situation
After 53 years of ownership, the unfortunate passing of a spouse left a widow in need of selling her home. The couple were original owners of the home, and it was filled with decades of personal possessions along with original appliances, surfaces and furnishings throughout the home. Though in good working order, the home appeared "dated" by modern standards and lacked the features, layout and color palette desired by most contemporary buyers.
The Challenges
50+ years of clothing, books, furniture, electronics, dishware, tools, and personal mementos that were no longer needed by the seller nor wanted by the extended family overwhelmed the home. And while you could feel the love and enjoyment this home served the family over the years, by outside appearances the aesthetics were no longer en vogue. Bringing the home to market to appeal to the masses might have required major expenses to update flooring, remove wallpaper and popcorn ceilings, and refresh all kitchen and bathroom fixtures and appliances.
The Goal
Realizing that the seller valued terms as much (or more) than price alone, we elected to sell off-market with a goal of: 1) transferring the home in its current condition; 2) avoiding any additional outlay of funds to make aesthetic improvements; and 3) negotiating a deal where the buyer assumed all of the sellers remaining possessions of the estate themselves.
The Approach
Through my extensive network of fellow agents, developers, builders and flippers, I had the reach necessary to quietly approach a targeted buyer pool who would most highly value and respond to this unique off-market sales opportunity. With a limited supply of other inventory available on the open market, the timing was right for this seller to maximize their margins utilizing this off-market approach.
The Results: 20 showings in 2 days yielded 12 competitive buyer offers!
Within two days, the property received 20 showings and attracted 12 competitive offers. The seller was thrilled with the quality and quantity of offers received. She was particularly pleased in not having to pay to prep her home for buyer showings, and felt relief with saving her family the added time, effort, emotion and expense in clearing away their unwanted items. I was ecstatic to have achieved all of the seller’s goals!
Conclusion
Selling your house off-market offers unique advantages for specific sellers prioritizing privacy, control and terms. While on-market sales provide broader exposure to more potential buyers, an off-market approach can be just as effective in achieving your goals when you work with the right professional. Always consult with a trusted real estate professional to weigh the pros and cons of each so you can make an informed decision.
Ready to Explore Off-Market Home Sales?
Contact our team of experienced real estate professionals today for trusted consultation and guidance tailored to your unique set of circumstances. You too can sell your house discreetly, maintain control and achieve favorable terms with our expert assistance!
