In today’s market we often hear of “off market properties”. But what does that really mean? Is it good for the industry? Is it good for the consumer? I will try to discuss the pro’s and con’s of this industry trend, but I have to be transparent and say that I am totally against off market real estate.
Some home owners do not want their neighbors to know that they are moving. So, realtors won’t place a sign in their yard, but more importantly they will not list their home on the MLS, Multiple Listing Service, which is accessed by licensed realtors.
-Unknown length of time on the market
Potential buyers will not assume that there are issues with the home due to the length of time on the market. Additionally, a potential buyer won’t offer less knowing that the property has been on the market for a while.
-Real Estate Brokers keep the sell “in house”
The properties are not listed on the MLS and only listed internally; the broker has a higher chance of double dipping which is listing and selling the same property.
When properties are not listed on the MLS, the listing realtor controls who sees the property. This can lead to discriminatory practices where the realtor only shows the property to select groups based on numerous factors such as race, ethnicity, socioeconomic status or sexual orientation.
-Inaccurate Industry sales data
There is no concrete or reported data on the number of days the house was on the market before selling. Additionally, often the agent/buyer/investor has a self-serving purpose for not conducting a market analysis to assist in setting the listing price. A self-serving realtor may set the price low to get a quick sell for his/her profit inconsiderate of the seller. The goal of a realtor should be to get the best possible price for the seller. Additionally, investors that offer homeowners a purchase price, often offer far less than the market value to individuals in need of cash. Unfortunately, this occurs in urban areas and especially to the elderly where income levels are lower and owners might have a great need for cash.
Well, those are my thoughts. Although this type of real estate is popular right now with so many people having access to social media such as Facebook and applications specializing in sale by owner, it is not necessarily good for the industry and the people who are protected by the proper protocols but in place by a regulated industry. The more people try to work outside of those parameters, the more people can be cheated, discriminated against and blocked from financial reward.
-Natasha Hughes Smith