Finding a good real estate deal can be hard. Homes on the market sell fast. By the time you see one, it could have several offers and you have to join a bidding war to get it.
That’s why off-market deals, aka pocket listings, are so attractive. They’re not on the multiple listing service (MLS) that real estate agents use. Instead, they’re listed for sale by the owner (FSBO) directly.
Of course, many traditional real estate companies don’t like FSBO deals because they bypass their ability to make a commission. In fact, the National Association of Realtors (NAR) recently enacted the Clear Cooperation Policy, aka MLS Statement 8.0, to make it harder for agents to offer pocket listings.
Nonetheless, off-market sales are on the rise because they offer some considerable advantages.
Benefits of Investing in Off-Market Properties
So what exactly are the benefits of off-market deals?
For one, pocket listings offer less competition. Because they are not publicly listed on the MLS, buyers benefit from more relaxed negotiations. This means you can find better deals and close on them faster.
Sellers also benefit. By selling off-market, they can gauge interest and test the market under less pressure. They don’t need to stage or show their home with an open house. This reduces foot traffic and puts them in more control over the sale of their house.
The increased privacy of FSBO deals also means neighbors, friends, and the public won’t know the home value, details of the sale, or personal matters related to the sale like a divorce.
Places to Look for Off-Market Properties
That said, finding off-market deals isn’t easy. But here are the best places you can go to look for them:
Local Real Estate Agents
Real estate agents always keep a close eye on the market. They need to know it like none other to find the best deals.
Find an agent to stay in the loop. For example, if you want to invest in an off-market property in Michigan, find an agent who is certified to practice there. They’ll probably know more than you do.
These days, there are plenty of online marketplaces that list off-market properties for sale. They include sites like Zillow, Realtor, and FSBO.com.
You might even find online marketplaces dedicated just to your local area as well. Think Craigslist.
You can always market to homeowners directly. You can do this by “driving for dollars.” This means driving around your neighborhood looking for properties you are interested in buying. Send the homeowners a nice postcard in the mail, and ask if they’re interested in selling.
I know. Everybody says to network, but it’s truly important. You can find some of the best real estate deals simply by putting yourself out there and talking to other real estate investors. They may have passed up deals that they’re willing to pass on to you.
You can also go to real estate networking events in your area or join your local Real Estate Investors Association (REIA). Find groups on Facebook and LinkedIn.
Keep your ears open. Word of mouth is powerful. Listen to attorneys, contractors, or even people in your personal circle. You never know who might have a real estate deal you could benefit from.
Go to your county tax office or deed recorder’s office to find public property records. Here, you’ll be able to learn about recent foreclosures and real estate owned (REO) properties. You may be able to buy these properties outright or in an auction if you act quickly.
Finally, you can find good off-market deals from wholesalers. Real estate wholesalers’ job is to find deals, put them under contract, and then sell the contract to interested buyers like you for a fee.
The nice thing about wholesalers is that they’re doing a lot of the work for you. So once you establish a relationship with one, you don’t have to spend as much time hunting for off-market deals on your own. You can let the wholesaler bring them to you as long as you’re okay giving them a cut.
Well, there you have it! If you want to find off-market properties, you’ll have to get out of your comfort zone a bit.
But luckily, there are more ways to find them than ever before. And with a little effort and patience on your part, you can find some amazing deals sooner than you think.