First of all, let’s wrap our minds around the idea of off-market properties. Why, you might ask, would anyone looking to sell something want to keep that fact a secret? In some ways, “off-market” is a misnomer. While these deals may not appear on the local listing service, they are still very much on the market.
For the most part, these deals are high-dollar properties that are not listed on any publicly accessible source. The listings for off-market deals have traditionally been very difficult for any but the very well–connected to access, usually requiring a contact with inside information.
Once an off-market property has been identified, potential investors often endure a verification process, which can involve signing a confidentiality agreement. Buyers must prove their identity and ability to pay. This is naturally followed by the usual work of due diligence on the property.
So, why would an investor want to jump through these extra hoops to buy an off-market property? Fewer people are aware of these deals, so there’s less competition, and sellers are often highly motivated.
What motivates the seller?
There are several reasons why a seller might prefer to make an off-market deal on a given property. One is to appeal to the very buyers described above: those who don’t want to compete on the open market.
Protecting sensitive informationIn
many cases, both buyers and sellers may prefer to keep the transaction private to prevent speculation as to why they are buying or disposing of an asset. This type of deal often includes a confidentiality agreement, in which the potential investor promises to keep private the details of the deal, including any marketing strategies or development plans that may come to light.
In some cases, properties are sold off –market because the seller and/or buyer want to remain anonymous. This happens frequently with high-profile individuals.
Biding their time
Other times, sellers are willing to wait as long as necessary to get the price they have in mind. Since properties that spend a lot of time on the market tend to lose value, they keep the information private.
An agent may suggest the off-market strategy in cases where it’s likely that the property can be easily sold without using the MLS. This saves the cost of the commission for a buyer’s agent. This practice can be more common in markets with a tight inventory.
Another circumstance that arises in a tight market is the “shopping” of offers. When a well-priced property gets multiple offers, an agent may share information on an existing offer in order to persuade other interested parties to make a better one. This can include details on the down payment amount or escrow stipulations. When a property is sold off-market, this sort of leveraging can be avoided, and privacy maintained.
My Jewel Club provides a valuable solution for those who like to operate in the Off-Market prestigious estate industry.
The relationship that is established with the Client is based on the special mutual confidentiality. In order to join the Club you need to successfully meet a number of criteria that guarantee the reliability and correctness of the applicant. This is because the information that is provided by the Club are very sensitive and confidential.