How to Find and Buy Off-Market Homes

What Are Off-Market Homes?

Also known as quiet or pocket listings, off-market homes are properties that may be for sale but aren’t listed on multiple listing services (MLS). That means real estate agents who sell these properties must do the legwork to find buyers on their own.

Listing homes off the market was a bit of a rarity in the past but has gained traction with homeowners. These listings become a secondary market of sorts, especially in the face of increasing demand and tight inventory.

Potential homebuyers want to stay ahead of their competition. Home sellers may want to keep the sale of a house private or save money on real estate commissions. This is where off-market listings come in.

Advantages for Buyers and Sellers

Buyers

For you as a buyer, the benefits of an off-market listing are twofold. For starters, it gives you access to inventory that fellow homebuyers aren’t seeing. If you are buying in a particularly hot market, off-market listings may be the only way to purchase a home. In regular market climates, you may get a deal partly because the commission that the seller has to pay is lower.

Not all homebuyers are looking for a primary residence. You may be searching for an investment property, or homes to buy and flip for a profit. An off-market listing in a great neighborhood can be an excellent way to accomplish that goal.

Sellers

Off-market listings may seem counterintuitive to a seller. After all, when there is more demand than inventory, bidding wars are common in many neighborhoods. So why would sellers want to keep their listings secret?

Some home sellers opt for an off-market listing to test the waters for buyer interest while others want a more private sales process or the opportunity to negotiate a lower sales commission as there is only one agent involved.

Some homeowners feel that an off-market listing creates an allure that will get them a higher price. After all, if the home is listed and ends up sitting on the market for more than 30 days, there is a good chance that potential buyers will try to make lowball offers. With no "days on the market" ticker, there isn't as much chance that a seller will be undercut.

How to Find Off-Market Listings

Contact Real Estate Agents

Finding a traditional off-market home requires a little research and lots of networking. Once you pinpoint the neighborhood you want to buy in, you’ll need to come up with a list of top real estate agents and contact them about any office exclusive listings (listings not entered into the MLS) that they may have.

Go Online

In addition to contacting real estate agents directly, buyers have tools available to them online to find non-MLS listings such as For Sale by Owner (FSBO). These include online classifieds, home sale sites, and even Craigslist. As noted above, the online website Zillow has several off-market programs available to potential sellers and buyers.

Approach Homeowners

If there's an area or neighborhood you're particularly interested in, one option is to check in with homeowners directly. You may be able to find a lead by knocking on doors or sending out mailers. Though this will cost you time and money, there is a chance that at least one person will respond.

Don't rule out neglected properties, especially if you know that you can afford to do repairs. Perhaps there's a homeowner who's so overwhelmed with the costs of upkeep—and one who never believed he could ever sell—that an unsolicited offer would be considered a blessing.

Make sure you print mailers that are both cost-effective and good marketing tools. After all, you want to seem as professional in your approach as possible.

The Buying Process

Finding an off-market listing is only half the battle. Seeing a deal go through is the objective, which is why buyers of off-market listings have to know the ins and outs of the process.

Once you get to contract, it is a standard deal. But as the agent is likely representing both the seller and buyer, things like compensation can get a bit murky.

As a dual agency sale (which is perfectly legal but not always recommended for buyers), it can be hard for the buyer to tell if the agent has their best interest in mind. That's because, the higher the sale price, the heftier the commission for the agent. How do you know whether you're getting the best possible price?

Now, if you are buying in a market with little inventory or high demand, it may not matter to you that you get the best deal as long as you get the home. But it pays to be aware of any conflicts of interest.

This is where the March 2024 proposed settlement of litigation over inflated home prices brought against the NAR (noted in the callout above) should help buyers and sellers.

Challenge for Off-Market Listings

MLS Statement Clear Cooperation Policy

A significant roadblock to off-market listings resulted from the passage of “MLS Statement 8.0 Clear Cooperation Policy” by the National Association of Realtors^® (NAR). This policy requires any real estate broker who participates in a multiple listing service (known as an MLS member) to submit their listing to the MLS within one business day of marketing the property to the public.

That makes off-market listings, which might have been private, "on market" and public.

The Practical Impact

It’s worth noting that MLS Statement 8.0 is not the law in the traditional sense. According to Realtor Doug Wagner of RE/MAX Victory + Affiliates of Dayton, Ohio, “The National Association of Realtors is a governing association, not a legal entity, but all member MLSs, brokerages, and agents of the association must abide by the ... policy.”

Wagner notes that licensed agents who are not Realtors (not members of NAR) are not bound by the policy. So any off-market listings they have can remain off market.

However, given the fact that from July 2022 through June 2023, 89% of homebuyers and home sellers used a real estate agent or broker, the practical impact is that Statement 8.0 applies to most residential real estate transactions.

Off-Market Listings Remain

Fortunately, MLS Statement 8.0 does not mean the end of off-market listings. NAR’s policy has built-in options that allow member agents and brokers to maintain both limited and full off-market listings.

For example, under MLS Statement 8.0, sellers may opt out of the MLS IDX or Internet display. Another option, known as an “office exclusive” listing is also available to sellers who want to maintain privacy. In the case of an office exclusive, the agent can share the listing with other agents in the office or one-on-one with buyers.

Certain other off-market options previously available through brokers, such as “private listing networks” are no longer permitted by Statement 8.0. Others, including “coming soon” and “delayed showing” are under the control of local MLSs but include restrictions that prevent agents from sharing them with buyers.

According to Wagner, Zillow, which draws listings from MLS data but is not a member of NAR, is not precluded from continuing in-house off-market programs such as "Coming Soon" and "FSBO." 

The Bottom Line

Off-market homes aren't listed on an MLS. They are homes that owners wish to sell privately. This can be an opportunity for home buyers who may have lost out to other buyers in the past.

Although MLS Statement 8.0 severely restricts access to off-market listings, it does not ban them entirely. And, not all real estate agents are members of the NAR (the enforcing agency) and thus may list off-market homes.

Just be prepared to do your homework and know that finding your next home through an off-market listing can be worth the effort.