In a time where everyone seems to catch FOMO or thinks they need something no one else has heard of (:: cue the Kim Kardashian video of her saying her sister Kourtney stole her wedding ideas::), people think that an off-market real estate deal is super exclusive.
Let Team Be New Orleans tell you why off-market properties aren’t the best deal – for homebuyers and sellers.
Overpaying
For potential home buyers, if a home has never hit the market, you haven’t seen how people will respond to it. Is the asking price too much? Time on the market is the only way to see if no one else is willing to pay that list price.
You may think you’re getting a deal. However, it could be a situation in which no other potential buyer would pay the price that you did.
No competition
There is a reason that the National Association of Realtors has required that a listing must be input into our MLS within one business day of advertising. This rule was put into place to protect the home seller. Many real estate agents kept listings off the MLS to practice dual agency.
Without your listing being exposed to the public, it lowers your buyer pool exponentially.
If you insist on your home not being input to the MLS, please know that your real estate agent can only tell other agents in their office about the listing and NO other agents. Otherwise, they violate the code of ethics and jeopardize their license.
NAR determined pocket listings to be risky and lead to potential lawsuits; hence, the rule was implemented for off-market deals.
Limited Negotiation Power
Without the competitive pressure of an open market, sellers in off-market deals might not be as motivated to negotiate on price or terms. Buyers could pay more than they would in a more competitive environment.
Risk of Under Valuation
Sellers in off-market deals might undervalue their properties due to a lack of market information or pressure to complete a quick sale. As a result, buyers might miss out on opportunities to acquire properties at their actual market value.
Potential for Unscrupulous Transactions
The lack of oversight that can come with off-market deals might expose buyers to more significant risks of fraudulent or unethical transactions. Proper due diligence becomes even more crucial in these scenarios.
We bring this up because many pocket listing deals have one agent representing both sides. We think this is a terrible idea.
Missing Opportunities
By focusing solely on off-market deals, buyers might miss out on on-market opportunities that could be equally or more suitable for their needs.
Skip the FOMO and check out what IS on the real estate market!
As your real estate agents, we want to protect you from every angle. Because we care, we want you to know that there are very few off-market deals that we think are worth it! (There are always exceptions, though!)
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Is it the house or is it the furniture?