Society, as it pertains to real estate investors, has lied to us.
We have been suckered into believing that a property that is for sale can be “off-market” and therefore supposedly a “good deal”
Let’s apply some good old fashioned logic to this.
If more than one person in a given market knows that a property is for sale, it’s “On Market” regardless who controls the transaction
An off-market property is not in any way, shape or form for sale.
Example: A listing broker with a “pocket listing” has something for sale that is not listed on the MLS this is not an “off-market property” because its for sale. It cannot be off-market and for sale at the same time.
Example: A wholesaler who has an assignable contract between themselves and a seller who plans to assign their rights in the contract at closing does not have an off-market property because they are trying to sell their interest in a contract that will facilitate the sale of a property.
Example: A wholesaler who has a PSA who intends to double close the transaction does not have an off-market property because they are marketing it for sale. It cannot be off-market and for sale at the same time.
I find that people also focus on off-market because they think they can make better use of limited resources and therefore make their money have more buying power. If you are price shopping and not getting seller financing there is no better way to shop than as a real cash buyer. No cash? You can learn how to raise money, the first step in doing that is to keep it simple and go to PrivateMoneyCrashCourse.com to learn how to raise money the easy way.
Let’s Talk About Pocket Listings:
Wikipedia says the following:
In the real estate industry in the United States, a pocket listing or hip pocket listing is a property where a broker holds a signed listing agreement (or contract) with the seller, whether that be an “Exclusive Right to Sell” or “Exclusive Agency” agreement or contract, but which is never advertised nor entered into a multiple listing system (MLS), or where advertising is limited for an agreed-upon period of time.
The reasons for a pocket listing may vary from the need for privacy or secrecy to discrimination, and some sellers may have their own reasons for not advertising a listing in conventional ways, including wanting to sell only to certain types of people. Several legitimate marketing strategies can also lead sellers to choose pocket listings. Pocket listings can be very appealing to buyers who seek exclusive opportunities. Other legitimate reasons for a seller to decide to do a pocket listing include the potential for a faster, smoother transaction when the listing agent has buyer clients who may be interested in the property. It can reduce the need for many showings to strangers.
Many buyers think that what they are told is an “off-market” or “pocket listing” must be a great deal already.
This is FALSE. In fact, recent studies have shown that in many cases the supposed “off-market” properties often sell for more money than properties listed in the MLS. This is mostly because of the perception that people have.
REO or foreclosures – same deal, as a matter of fact, I used to sit Bank-Owned Foreclosure open houses specifically because they received more traffic than traditional open houses did. My signs were bright yellow with black colored font to capture your eye. I have the word “Foreclosure” in HUGE font size to grab your attention (by the way, we call that a “hook”.)
I hope that after listening to this episode you will be empowered to make better deals and better prepared to tune out the hype and the FOMO that many buyers face when it comes to buying a rental property or any sort of real estate for that matter.