What Does Off Market Mean When Shopping for a Home?

Other common real estate status definitions

In the realm of real estate, various status tags can give you insights into a property’s current standing in the market. As you navigate online listings, here are some of the most common real estate status definitions you might encounter:

• Active: The property is currently on the market and available for sale. Buyers can submit offers.
• Pending: An offer on the property has been accepted by the seller, but the sale has not yet closed. This pending status often indicates that all contingencies, such as financing or home inspection, have been met.
• Contingent: The seller has accepted an offer, but the sale is contingent upon certain conditions being met. These might include a satisfactory home inspection, the buyer selling their current home, or financing approval. Properties in contingent status are still considered active listings because the sale can fall through if the conditions aren’t met.
• Under contract: Similar to pending, “under contract” indicates that an offer has been accepted and the property is in the process of being sold, but the deal has not yet been finalized. The term is often used interchangeably with “pending.”
• Sold: The property has successfully been sold and the transaction has been completed.
• Withdrawn: The property was on the market, but the seller decided to take it off temporarily or permanently, often due to a lack of offers at the desired price.
• Expired: The listing agreement between the seller and the real estate agent has expired without the property being sold.

Depending on how your area MLS handles labels, these status tags can also be combined. You might see “Active contingent,” or “Active pending,” or even something like this:

• Active offer no bump: This status means the seller has accepted an offer with contingencies, but unlike a standard contingent offer, the seller is not accepting backup offers. Buyers interested in the property are often discouraged from submitting an offer, as the seller has committed to waiting for the current buyer to meet the contingencies without the possibility of being “bumped” by a new offer.

Understanding these statuses can help you better navigate the home-buying process, making it easier to identify which properties are available and which are already under agreement.

Why would a seller keep a house off market?

When selling a home, the traditional route involves listing it on the open market for all potential buyers to see. However, some sellers opt for a less conventional path by keeping their house off market. This strategy can be motivated by various personal and strategic reasons, offering sellers a more controlled and discreet selling experience.

Whether it’s to maintain privacy during a life transition, avoid the hassles of public listings, or strategically manage market perceptions, off-market sales cater to unique seller circumstances. Let’s explore the reasons why a seller might choose to keep their house off market:

• Landlords with an existing tenant: A landlord selling a rental property but doesn’t want to alert an existing tenant that they are selling the home.
• Homeowners dealing with a life change: A person going through a divorce, financial hardship, or managing a sensitive family health emergency might want to keep their situation private.
• Someone who wants to avoid foot traffic: A homeowner who does not want strangers or busybodies walking through their home for showings or open houses might prefer an off-market sales strategy.
• On-the-fence sellers: Some homeowners may just want to test the market to see what buyer interest or selling price might be possible if they decide to put their home on the market. These sellers may not be in a pressing situation and have time to dip their toe in the housing market pool before fully jumping in.
• Agents controlling “Days on Market” data: A real estate agent may use an off-market or pocket listing strategy to avoid adding days on market (DOM) to a listing they are preparing to post. DOMs are a key data point in residential real estate sales. If a listing has a lengthy DOM, it indicates that a house has been on the market for a long time, and this can make it look like there is something wrong or undesirable about a home. High DOMs can also embolden buyers to submit lowball offers.
• Sellers looking to bypass delays: In some cases, an off-market sale can be a faster sales process. With the right buyer-seller connection, a deal can sometimes get around the longer timelines associated with public listings.

Why would a buyer seek out off-market homes?

In a competitive or low-inventory market, finding the perfect home requires strategy, patience, and sometimes a bit of insider knowledge. Off-market homes represent a unique segment of the market that can offer buyers distinct advantages.

From securing a better deal to avoiding the frenzy of a bidding war, the reasons for targeting off-market properties are as varied as the buyers themselves. Here’s a look at why buyers might go off the beaten path in their home search:

• Real estate investors looking for bargains: Investors often keep an eye out for off-market house deals. They may be looking for a home being sold by an owner who is selling FSBO because the property needs repairs.
• Buyers avoiding competition: Home shoppers may be looking for properties that other prospective buyers haven’t seen yet. Less competition for a home can result in a better sale price.
• A buyer wanting to avoid deadline pressures: If a buyer is not in a hurry, purchasing a house can be a smoother, more relaxing experience. Negotiating an off-market purchase often has less stress and a calmer negotiating table.
• Buyers seeking a more personal experience: Off-market deals often allow for direct and flexible discussions between the actual buyers and sellers. This is not always the case with a traditional agent-arranged transaction. The pace and nature of an off-market purchase have the potential for a more personalized buying and selling experience.

How can I find off-market properties?

Finding off-market properties requires a blend of strategy, networking, and sometimes a bit of creativity. These properties aren’t typically listed on the MLS, making them less visible to the general public. However, with the right approach, you can uncover these hidden gems. Here’s how to start your search for off-market properties:

• Network with real estate professionals: Real estate agents, especially those who specialize in your area of interest, often have inside knowledge of off-market properties. Building relationships with these professionals can give you access to exclusive listings.
• Use a direct mail campaign: A strategy many investors use is to send personalized letters or postcards to homeowners in a desired area. Whether you are an investor or a private buyer, this can be an additional way to find off-market properties. This approach can especially resonate with owners who haven’t yet listed their property but are considering selling.
• Engage in online real estate forums and groups: Online communities and social media groups focused on real estate can be excellent resources for finding off-market properties. Members often share leads on potential sales and tips on properties that haven’t been publicly listed.
• Work with real estate investors: Many investors already have their finger on the pulse of off-market properties. A local investor may be willing to share information or collaborate with you on a potential deal.
• Consider using a property finder service: Some companies and pocket listing services specialize in locating off-market properties for buyers. While these services can come with a fee, they can save you time and effort in your search.
• Explore public records and auctions: Sometimes, properties are sold off-market through auctions or are identified through public records before they are listed for sale. Keeping an eye on these sources can reveal opportunities that others might overlook.

You can also search for pre-foreclosure listings on real estate sites like Zillow. A homeowner facing foreclosure might be motivated to sell quickly and at a lower price than other similar homes on the market. Selling off market might help them avoid having a foreclosure on their credit history. Many home listing websites have a “Pre-foreclosure” search filter.

How are most buyers finding the right home?

If you feel frustration as you search for the right home, you’re not alone. According to a recent survey by the National Association of Realtors (NAR), 56% of buyers say finding the right property is the most difficult step in the homebuying process.

And while 29% of home shoppers say the agent first introduced them to the right home, NAR reports that 89% of buyers purchase their homes through a real estate agent or broker. Only 6% purchased directly through the previous homeowner.

Partner with a top agent to find off-market properties

If you’re unsure if an off-market property is the right home purchase strategy for you, consult with a professional. Experienced real estate agents have the networks, knowledge, and negotiation skills needed to uncover these hidden gems and guide you through the purchasing process.

What’s more, you can explore this option without cost or obligation. Most seasoned agents will be happy to give you a free consultation and advice. HomeLight can connect you with the highest-rated agents in your desired area who have a proven track record of finding off-market homes.

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