11 Ways to Find Off-Market Properties For Sale

Many successful real estate investors know the secret of finding and buying off-market properties. While discovering these deals may be tricky, you may stumble upon a great and lucrative real estate investment if you know how to find off-market properties.

What Are Off-Market Properties?

Off-market properties are not publicly listed for sale on the Multiple Listing Service (MLS). However, that doesn't mean they aren't for sale.

Buying houses off-market happens more often than you might think. For example, the National Association of Realtors (NAR) reports that around 10% of home sales occur without being listed on the MLS. Typically, off-market sales are common in hot markets where demand outweighs supply heavily, meaning that a home can sell easily without ever going to the public for sale.

Pros of Buying an Off-Market Property

Searching real estate markets for off-market properties widens the net of investment opportunities. Real estate investors should look for off-market properties for a few reasons:

• Off-market prices can be negotiated better due to less competition.
• Lower competition, in general, equals a better chance of your offer winning.
• You can negotiate other, more favorable terms that aren’t always available on-market.

Why Do Sellers Go Off-Market?

The three reasons sellers typically choose the off-market route are privacy, potential savings, and price testing. Also, the off-market listing process ensures sellers can reach the right buyer or buyer’s agents and only get interested, motivated parties. Sellers can also save on marketing costs, listing fees, and staging.

How to Find Off-Market Properties

The best way to find off-market properties for sale is to use a reputable off-market listing platform. Some websites specialize in off-market real estate sales, whereas others, like Zillow, have listings for “for sale by owner” (FSBO) sales.

While that’s a good start, there are other ways to find off-market deals.

Real estate auction websites

Leverage the power and reach of real estate auction websites. They can give you access to off-market properties such as foreclosures and bank-owned properties. Ensure you do your due diligence before placing a bid, as these often sell as-is. You don’t want to bite off more than you can chew with an off-market property.

Facebook Marketplace and Craigslist

Don’t underestimate the potential of social media and online platforms. Both Facebook Marketplace and Craigslist are good places to search for off-market properties.

Sellers often use these platforms to avoid agent fees or to test the market before formally listing. Create a daily routine of browsing these platforms for new listings and be ready to act quickly when a good deal pops up. They go fast!

Door knocking

As old-fashioned as it may sound, door-knocking is still a valuable strategy for finding off-market properties. This method involves you identifying homes in your preferred areas and physically knocking on doors to express your interest in buying. It might be time-consuming, but the direct approach can yield surprising results, especially if homeowners are considering selling but haven’t taken the first step yet.

Phone prospecting

Phone prospecting is another proactive approach that requires resilience. You can obtain lists of homeowners from various sources (like public records or lead generation services) and then make calls to inquire if they’re considering selling their property. While you’ll face a fair share of rejections, patience, and persistence can lead to excellent off-market opportunities.

Search for “For Sale By Owner” yard signs

Keep a sharp eye out when you’re driving through your target neighborhoods. You’ll occasionally spot For Sale By Owner signs on lawns. These sellers are trying to bypass the traditional real estate process, making these properties off-market opportunities. Note the address, reach out, and express your interest.

Use a direct marketing campaign

Craft a personalized direct marketing campaign to reach potential sellers. This could involve sending mailers, flyers, or even personalized letters to homes in your target area, expressing your interest in buying properties. This method helps put your name in front of homeowners who may be considering selling, pushing them to reach out to you first.

Network with listing agents specializing in non-MLS properties

Building relationships with real estate agents specializing in non-MLS properties can provide a steady stream of off-market opportunities. These agents often have exclusive access to properties that aren't publicly listed, and networking with them increases your chances of getting the first look at these hidden gems.

Build a professional network

Build a professional network of wholesalers, contractors, and investors using real estate forums like BiggerPockets.

These real estate professionals often know about potential sales before they become public. Attend networking events, and join online forums and local real estate clubs to nurture these relationships and expand your network. It’s often the best way to find the perfect off-market property.

Search public records for foreclosures

Short sale and foreclosure opportunities are typically a matter of public record, and staying current with these records can tip you off to properties that may come up at auction. Watch the local newspaper, browse local and state government websites, and keep websites like the HUD Home Store bookmarked, which will alert you to up-and-coming properties.

Attend local events

Local events such as community gatherings, property auctions, or real estate investment meetups are excellent places to discover off-market deals. You’ll find like-minded individuals, potential sellers, or others who might give you a tip about a property that’s about to be available for sale. Always have your business cards handy and be ready to follow up on leads promptly.

Work with an investor-friendly agent

Rather than conduct a search independently, work with an investor-friendly agent (or multiple real estate agents) who can keep their eyes open for off-market properties. They can bring you these opportunities before anyone else, thus improving your odds of closing a deal. The BiggerPockets agent match service can connect you with experienced, knowledgeable real estate professionals in your local area. As a real estate investor, you need an agent who understands the local market and how it ties into your strategy.

How to Approach a Seller

There are several ways to approach a potential seller if you are actively looking for an off-market property. For example, you could print high-quality postcard-size flyers for a direct mail marketing campaign. In some markets, real estate investors go door-to-door and ask homeowners directly.

Another option for meeting with sellers is to search for distressed properties in a neighborhood. These could be abandoned homes or foreclosures. You could then track down the owner with a little investigation at the county records office or online.

Some investors have success writing a personalized letter to the homeowner with a solid, attractive offer to buy the home.

It is also good to remember that some off-market sellers are facing financial hardship and may be facing foreclosure. Therefore, it’s important to be empathetic with the seller as they may be going through a lot of stress.

Tips on Negotiating

When negotiating with the seller on an off-market property, a strategic approach may help you land the off-market deal. Here are a few negotiating tips to be successful:

• Have a good idea of local housing market conditions to determine if it’s a seller’s or buyer’s market.
• Offer higher down payments to stand out from the competition.
• Counteroffer until you are sure the seller won’t budge on their position. Remember, a lowball offer significantly below fair market value could antagonize or insult the seller.
• Negotiate contingencies in the sale contract. This protects you in the deal if the home appraisal is low or a home inspection finds major issues with the property.
• Have your finances in order with either a pre-approval letter or cash to buy the home.
• Work with a real estate agent to finalize the deal and negotiate nuances in the purchase contract.

Final Thoughts

Off-market properties can offer endless investment opportunities if you know where to find them. Therefore, it makes sense to include looking for off-market homes as part of your real estate investment strategy. And remember, you’re not the only real estate investor searching for deals. Be ready to make fast, decisive, and informed decisions.

This post originally appeared on the BiggerPockets blog.