Why does off market selling exist?

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I just purchased a property off market and the reason was for the seller to not have to pay commissions to an agent. Saved them a few thousand dollars. I got a pretty good deal too, so I’m not complaining. Also if a buyer is willing to pay what the seller is asking for then there is no need to list the property. Listing can require the seller “sprucing” up the property and some people may not want to go through that hassle.

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Also while this isnt generally the market people on here are buying in, luxury listings...sometimes you can sell these for more off market than on. You get a higher price because someone wants the exclusivity of buying something that was not available for the entire general public to buy.

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Some sellers just don't want to deal with the hassle of listing on the MLS. I just met with an elderly lady yesterday who has some health problems. Of course, she wants the most she can get for her house, but when it's explained that there are costs (closings and agent fees), inspections, potentially updating the property, showings, dealing with lenders, etc., it was quickly apparent to her that it's a lot of work. Often, they just want to be done with it. Selling off market usually involves trading equity/money for an easier transaction and there are many people out there that will make the trade off.

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Hey @Michael M.The off market properties your agent is bringing you would result in less money lost to commissions for the seller, yes. When a house is sold through both a buyer's and seller's agent, commission goes to both of them. Some FSBOs will still agree to sell through a buyer's agent (and pay them commission) since the agent can take care of setting up the bulk of the paperwork so the seller doesn't have to.One way or another, the reason off market properties exist is because the targeted buyer can provide something a random buyer with a buyer's agent can't. Maybe that something is a personal or professional relationship with the seller that would convince them to sell to that particular person. Perhaps the seller is in a dire situation and needs to sell NOW, and the buyer is offering to pay cash, pay all closing costs, and close quickly instead of waiting a month and a half for a mortgage to be approved. Or maybe the house isn't in the best condition and the seller doesn't want to go through the hassle of fixing/prettying it up, finding a seller's agent, waiting to find a buyer, waiting for the mortgage, etc (mentioned earlier in this thread).Much of marketing involves contacting potential sellers and highlighting the benefits you can provide, and hoping you contact them at a point in which they are motivated to get rid of said property. You can't create motivation, but you can connect with a motivated seller and convince them through your message that you're the person they should sell to.

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Hi @Michael M.,Often times it is the hassle like @Derek E. stated. Sometimes the owner just has an idea of what they want and investors trade properties like kids use to trade baseball cards. One is closer to their other ones, they want to own a whole street, they know the buyer. They have an idea of what they think it's worth and are just happy to get that. Terms are also a factor, quick sale etc. But in general if price is the only factor then yes get it in front of as many eyes as possible.

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Most people want to save on commission to agents. Besides, if the price is good for them and they have ready, willing and able buyer for their price - why not?

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Because the broker makes the most money out of the transaction.

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The simplest explanation is it lower the cost of the sale. Marketing a property costs a agent/Broker money and time. Therefore they expect a commission, which is typically paid for by the seller. Selling off-market can frequently save quite a bit of money in commissions, even when factoring the higher sale price the agent promises. A deeper explanation requires examining the seller’s specific distress and motivation. If a seller is facing eminent foreclosure, or needs to close quickly for some other reason, an on-market sale might not proceed quickly enough for them. The property may require a lot of work to get any curb appeal. The seller might not have the money to make those improvements and on-market deals with curb appeal are what sell to buyers like that. A seller’s motivation to sell might mean they need to close quickly (I.e. job taking them out of the area). Maybe they have a new home under contract in the new location and can’t afford two mortgage payments. Basically, on-market deals typically take longer to sell.

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Thanks all. In my case I’m using an agent and he’s bringing me off market properties so the seller is still paying a fee but maybe it’s lower? Maybe they just want to know they are getting properly vetted buyers. Thanks again for your thoughts.

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I am buying the house I have been renting. It was 100% off market. She said she was going to list it for sale, I asked how much. She told me how much she was planning to list it for and how much she would sell it to me for. Shes older and its a great deal so I told her I would for sure buy it lol. She didn't want to deal with the hassle which is why she was pricing it so low anyways.