Homebuyers with their eyes on specific homes, or ones who want to be at the front of the line when homeowners make the decision to sell, might try to find their ideal properties before they hit the market. Interested parties might hear about an off-market opportunity through the grapevine, or perhaps they leave a letter in their dream home's mailbox, informing the homeowners of their interest should they decide to sell the property. Just as sellers have different motivations for moving, buyers often have various tactics for pursuing desirable properties.
In 2016, only 8 percent of home sales in the U.S. were off market, according to the National Association of Realtors. Many people, particularly first-time buyers with limited experience in the real estate market, prefer to use real estate agents and brokers to guide them through the selling and buying processes. This NAR study also reported that 58 percent of "for sale by owner" homes sold in less than two weeks, suggesting that many sellers know their homebuyers. This compares to the overall average days houses spend on the market, which currently adds up to 61 days. Navigating off-market property trends can be difficult, but the buying process accelerates exponentially.
Finding off-market homes
The easiest way to find properties before they officially go on the market is to ask real estate agents if there are any listings they are trying to get. Real estate agents may use prospective buyers to entice sellers to take the leap. Buyers who express interest before the home officially hits the market are typically first in line for showings and offers, since sellers want to speed this process as much as possible.
Homebuyers can find out about for-sale properties before they hit the market by keeping their eyes and ears open for homeowners' life transitions. Parents expecting a child might want to upgrade to a larger home, while those becoming "empty nesters" might plan on downgrading.
Compromising on a price
One component that can make or break the home sale is the asking price. If the seller highballs the buyer, the latter could dismiss the offer. Buyers might lowball the value if they aren't aware of certain home improvements. Both parties need to find a fair price to compromise on.
An effective way to get an accurate estimate is by hiring home appraisers to represent both parties. Once the professionals offer their estimates, the buyers and sellers can average these two figures. If either believes this number does not accurately reflect the home's market value, they can call in a real estate agent.
Calling in professional assistance
Sellers and buyers often consider conducting an off-market transaction to save on a real estate agent's typically 6 percent commission. However, they often hire real estate professionals during this process. Both sides might feel uncertainty about overpaying, in buyers' cases, and underselling, in sellers' cases. Hiring an agent can provide both parties with peace of mind that they are getting the best deal possible.
Real estate personnel have the expertise to establish a home's fair purchase price based on market trends. In a high-demand, low-supply market, the agent might award the sellers with savings. In a high-supply, low-demand market, the buyer might reap the monetary benefits.
Both parties can hire real estate agents for advice in the sale of off-market homes for a single fee. If the agent's role is solely to help them come to a compromise regarding the home's value, they might be paid for a day's work. Buyers might decide to keep agents on to deal with the back-end components of the sale. They might construct the contract, hold a home inspection, perform a title search and prepare the closing disclosure. Since they wouldn't be involved in marketing the home or holding showings and open houses, the 6 percent commission can likely be reduced.
A particularly helpful piece of advice for buyers of off-market homes is to go with their gut. Don't allow the sellers to take advantage of you. If you feel hesitant, call in professional assistance. You might have to pay a small commission in exchange for an agent's services, but the potential risks you could face by pursuing an off-market transaction on your own might not be worth it.
For more information about this article, call 866-614-5959.