"Off market" does not always mean a good deal...

[Alan Asriants]

Writing this post mostly for newer investors looking to get into Real Estate

It's tempting as a newcomer to fall into things like "off-market" "exclusive" etc. 

Truth be told, just because it is off market doesn't mean the deal is good, in fact this tactic is often used to get people to believe something is worth more than it actually is...

I recently had an interaction with another Real Estate agent/wholesaler who reached out to me about a listing I have. 

Without even introducing himself or saying hello, they went straight to the point and told me that it was ridiculous and funny to see that I had a listing up for $750k because 2 years ago his clients offered the seller $750k "off market" and the seller declined. He told me to let him know when the property is off the market so he can talk to his client again and share with him the property. 

Yes, seems frustrating from the agents point of view. But I couldn't understand why the agent wouldn't show his client the listing at the new price and have him take it from there... I mean, the property is marketed to be sold, its the exact price that was offered before, and the agent doesn't have to negotiate a commission. Also, it's not like this listing is killing it, in fact there is room for negotiation.

So when I asked the agent why he wouldn't just show the property to his client, he responded by saying: "If I show him that it is on the market my client won't think it is a good deal and won't make an offer"

This just goes to show that using words like "off market" can actually make someone think they are getting a better deal. Instead of showing his client and negotiating the price down. He is going to wait until it is off market, offer it to him at $750k and tell his client he is getting an off market deal. 

This is not the first time I see this. I've seen many cases where off market deals are much more over priced than on the MLS. In fact, some of the best deals I have bought and millions of others have bought have been on the MLS.

I will always tell my clients to send me the details of any off market property they are looking at so I can screen it. If it's a great deal I encourage them to go for it! 

Note: This is not to say that there aren't deals off market. Some good deals come out of it too.