Selling My House Off-Market Saved Me Time and Stress — But Realtors Say It’s Not For Everyone

published Feb 3, 2021
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We weren’t planning to list our house until the spring, after we had a chance to do some projects our realtor told us would make the space more appealing. Then, on a Sunday afternoon in November, my phone lit up with a text from a neighbor. “Do you know anyone on our street who wants to sell their house? My sister and her husband want to buy in the neighborhood.” 

I told my neighbor about our situation — that we were planning to move, but didn’t know exactly when — and she quickly put me in contact with her sister. After a Skype tour and walkthrough, the couple put an offer on our house — for just the amount we would have listed it. We ended up moving sooner than planned, but we also skipped the stressful steps of staging, multiple showings, and waiting for offers. 

According to realtors, because it’s still a seller’s market, buying or selling a home off-market has its pros. But before you field a mass text to people in the neighborhood you want to move to or accept an offer on your unlisted home, it’s important to consider a few caveats. 

When and why do off-market transactions occur?

Arlene Reed, a broker with Warburg Realty in New York, says sellers and buyers can have unique motivations. For the seller, there is better control, a chance to test the market without listing, and more privacy — which Reed says may be particularly appealing for people going through a divorce or family member’s death. 

For us, the pandemic was a major driver: It was nerve-wracking thinking about people walking through our house. Plus, we didn’t have anywhere to go during showings.

For the buyer, Reed says, it’s all about minimizing competition. “In a seller’s market, there are fewer listings and for some buyers, it is difficult to find what they want, so they are willing to pay a premium to get it,” she says.

How do you find out about off-market listings?

In our case, it was happenstance. Someone really just wanted to get in our neighborhood, and they happened to have a connection down the street. Michael J. Franco, a broker with Compass, says some off-market sales happen within buildings or neighborhoods where neighbors talk. Theoretically, according to NYC-based broker James McGrath, you could also just knock on someone’s door and make an offer.

According to Reed, many off-market listings, also called quiet listings or pocket listings, tend to come from a personal relationship that a seller or buyer has with an attorney or real estate agent. “For a seller, the listing gets pitched to a select group of potential buyers and real estate agents,” she says. “For a buyer looking for an off-market listing a broker can write letters to owners who for the right amount of money might consider selling.”

Do off-market sales require a realtor?

For some people, the ability to sell by owner is the impetus. According to Franco, some sellers and buyers opt to do this transaction without a realtor, which can save money. That’s appealing for sellers, who want to make more on the sale, and buyers, who usually cover closing costs (including realtor commissions).

Both sides of our transaction used a broker, mostly to make sure we didn’t miss anything — for us, reducing the stress was worth the few thousand we sacrificed in realtors’ fees.

No matter which route you choose, Bezak says, you can still do an inspection and appraisal before you close; the only difference is the house was never marketed or listed.

Should I look for an off-market listing?

If your goal is to get the most money possible for your house, an off-market transaction might not be for you. According to Christopher Totaro, an agent with Warburg Realty, off-market listings defeat the purpose of establishing the highest price by marketing a property to the greatest number of purchasers. 

While pursuing an unlisted house might reduce your competition as a buyer,  you might spend more than you budgeted for to maneuver your way into a specific neighborhood or home. Chances are, the seller will need motivation to sell — a high asking price — especially if they weren’t planning on moving. 

“I am generally wary of these forced off-market transactions because you’re trying to buy from someone who isn’t looking to sell,” says McGrath. “Usually you’ll have to pay more: what it’s worth and then a little extra to make them move.”

But if you’re like the folks who bought our house, and you’re set on a location where there’s limited inventory, it might be worth it. According to McGrath — you could get lucky and catch them when they were thinking of selling and pay a more reasonable price. It worked on us!