In a previous post we looked at the importance of leveraging each real estate listing you have into additional opportunities.
Most of the time when real estate agents market their properties to generate leads, they tend to focus on homes that are already listed and in the MLS, whether they use magazines, direct mail, Zillow, Craigslist, etc.
First, let’s define “off-market” vs. “pre-market” homes:
Off-market homes are properties that are have a valid listing agreement, but are not on the MLS.
Pre-market homes are usually REO (foreclosure) properties that have gone through the foreclosure process and have been assigned to an REO agent.
When should you consider promoting an off-market property?
- when the seller has special requirement
- when an off-market strategy is advantageous to the seller
- when you have pre-marketing REO properties that are not yet ready to list (provided your Master Listing Agreement allows you to do so)
When is an off-market strategy beneficial for the seller?
One of the most common arguments from those who object to agents promoting off-market properties is that there is not benefit to the seller. In fact, they propose that it may actually harm the seller because the property is not receiving full exposure to the market, may not attract the most offers and thus may not receive the highest price.
You do have to make sure that your off-market strategy serves the seller’s best interests as defined by the seller and that you disclose the up and down sides of using this strategy. Failure to disclose and preserve the seller’s best interest can be a violation of your state’s real estate licensing laws, MLS terms and conditions and the Realtor® Code of Ethics.
There are many situations thought, were it may be in the seller’s best interest to utilize an off-market strategy, for instance:
- when a seller wants to restrict the number of showings to avoid the hassle of multiple showings (e.g. rental property occupied by tenants)
- when the seller has special circumstance, privacy requirements, health concerns, etc.
- specialized listings that require specialized buyers (e.g. ultra high-end luxury properties)
- pre-marketing REO properties – the agent can start to generate prospective buyer leads weeks before the property is ready to list (providing the Master Listing Agreement does not prohibit this). By doing so, the agent can have one or more buyers in waiting for when the property is ready to be listed. Using a strategy like this for an REO property can significantly reduce the Days on Market (DOM) and more importantly the Days in Inventory for the client (be sure to check out my post on how to effectively use Craigslist to leverage pre-marketing REO properties)
What are the potential benefits to a real estate agent using an off-market strategy?
As we explored a moment ago, the agent must first make sure that an off-market strategy serves the seller’s interests first and foremost. The agent’s interests can never take precedent over the client’s.
When the seller has determined that an off-market strategy is in the seller’s best interest, using this strategy can also benefit the listing agent in a number of different ways, including but not limited to:
- generating leads
- building your buyer database
- increasing your opportunity to double-end the listing (provided your state laws allow for this)
- building a loyal following of customer with your “off-market” property list
What are some ways you can promote an off-market property?
- Zillow – a few years ago they introduced a “coming soon” feature. Agents can manually upload their listings, but keep in mind that this feature is only available to paying Premier Agents. On the upside, when buyers view your coming soon properties, only your information populates, meaning you don’t have to compete with other agents for the leads
- Craigslist – you can post your off-market properties on Craigslist the same way you would post your regular listings. (If you are unfamiliar with how to post a property listing on Craigslist, you can view a 5 minute tutorial and also be sure to check out my post on how to effectively use Craigslist to leverage pre-marketing REO properties)
- Your buyer database – these are buyer leads you have collected from past marketing efforts, open houses, etc. One way to market to them would be to email every buyer in your database an “exclusive off-market” property invitation. Another would be to call buyers in your database that have expressed specific interest in the area your listing is located (this is easier if you have a robust Contact Management System that allows you to search the notes section of your leads)
- Your Sphere of Influence (SOI) – similar to the buyer database strategy, you can send your SOI an email, for example, with an “exclusive off-market” property invitation and to ask them to contact you if they or “someone they might know” is interested in the home
In conclusion, using a “coming soon” or off-market strategy as part of your listing leveraging system can be beneficial to the seller as well as generate additional leads, opportunities, closings and ultimately more income for you.