How to find off market properties.
In a tight sellers’ market, it seems as if homes sell before the for-sale sign even goes into the yard. Homebuyers can become frustrated and discouraged, especially if they don’t know all the resources available to them. This is how the real estate industry works – there are properties listed for sale in the local Multiple Listing Service (MLS) by licensed Realtors, but there are also ways to buy properties that aren’t on MLS. These “off-market” or “exclusive” properties are available for sale, or could be, with the right offer. Here’s how to find them.
Your Realtor’s Network
One of the biggest benefits of working with a professional Realtor is their Realtor network. Most real estate brokerages have a system that allows their Realtors to share “coming soon” and “exclusive” listings. These internal systems allow their buyers to gain early access to each others listings.
Additionally, Realtors from different brokerages utilize industry specific groups to share listings and buyer needs with one another. These professional networks result in a significant number of off market transactions.
If you are looking to find an off market buying opportunity it’s critical that your Realtor know what you’re looking for, including a location, price range and type of property, so that they can start to leverage their network in the right ways.
Pocket Listings
In 2023, CREA enacted a new policy that will require Realtors to submit their listings to the MLS within three business days of marketing the property to the public, through websites, flyers, yard signs, and electronic alerts. The policy will take effect as of January 3rd 2024. This policy is intended to increase a properties exposure to every Realtor and their clients, making listing a property fair to all.
Off market sales by Realtors are often called pocket listings, because their concealed in the “pocket” of the Realtor. Their purpose is to give the Realtor time to sell the property to their own homebuyers and avoid sharing commissions with other Realtors.
Pocket listings can be the result of a homeowner not being ready to full list their property or not wanting the listing to be public record. In this case, the only way you will become aware of the listing is by being part of a Realtor’s database.
For this reason, pocket listings offer buyers and their Realtors very little control over the buying process. The new CREA policy will make pocket listings even less effective.
Expired Listings
Another effective way to find targeted off market listings is through expired’s. The advantage of expired listings is that there is an intent to actually sell the property. Listings often expire because the seller hasn’t been able to achieve their desired selling price. This can signal a seller with unrealistic pricing expectations, however sellers often end up adjusting their pricing the longer their property sits unsold.
Your Realtor has the ability to search for all of the expired listings and can then connect with the previous listing Realtor in order to start a conversation and identify whether there is a fit between the buyer and seller.
Builders and Contractors
Homebuilders often know of or have properties that are in some stage of construction. A homebuilder can tell you when a property is going to be finished and you can give them a deposit to secure first dibs. Contractors and subcontractors are frequently hired by homeowners to improve their properties in preparation for the market. If you’re driving around the neighborhood where you’re interested in purchasing and see work being done, stop and ask the contractors if they know whether or not the home is being put on the market. Even if they don’t know anything, you can leave a note for the homeowner.
Local Mailers
If you are interested in a specific neighbourhood or specific streets in the neighbourhood, mailers can be an effective way of finding a current homeowner that is interested in selling. Your Realtor may offer this as one of their buying services, especially of the neighbourhood that you are looking in is one where they invest their advertising dollars.