Question: Is Selling Off Market Right For Me?
Answer: That All Depends (how is that for a non-answer answer?)
We’ve been doing this forever (more than 2 decades...when did that happen?) and our experience has lead us to believe wholeheartedly the open market provides the best price and fairest results for all concerned when parties are represented by ethical, knowledgeable brokers following proven models. The optimal ways to prepare, market, negotiate and sell a property can be completely customized for particular circumstances to get most of the benefits of the open market while avoiding potential costs of time, money or inconvenience. Got a pet python that doesn’t like humans, we can work around it. No time to clean or pack, we’ve got you covered. As a rule we can work around nearly all circumstances to create custom solutions & still sell on market. You know what happens with rules though, right? There always has to be something that goes against them!
Here are a some cases where selling off market makes the most sense:
Gifts or Favors to Family/Friends
When you feel like it’s worth foregoing profit to do a favor or give a gift. For example, your super cool niece is buying her first house and you want to help by selling her your home at a reduced cost or you are an incredibly altruistic person (go you!) and would like to help a first time homebuyer that is continually getting beat in this market...you get the picture.
Maximization of Convenience or Privacy in Distressed Circumstances
If you need or want a higher level of convenience or privacy which simply can’t be accomplished through an open market sale, an off-market sale may the appropriate tool - though it doesn’t necessarily mean you must limit the market to 1 buyer. For example you are leaving for your dream job in a week and don’t have time to prep the house (although there is an easy argument that our team can do all the prep work for you...we have and will, just talk with us!) or there is someone that can’t leave the home for whatever reason (again, there are workarounds for this, but I digress). Or maybe you just don’t want new people coming through your front door? Again, you get there picture...there are sometimes reasons people can’t or don’t want to deal with working around and would prefer to stay off market.
Best Practices for Off Market Sales
If you are thinking of selling off market, whether to a family member or friend, or due to the need for privacy or convenience, here are some best practices to follow:
Hold Your Intentions Close
To avoid the onslaught of pressure from others, and the urge to simply say ‘yes’ to be nice, do your best to keep your plans to yourself until you determine a true plan of action. Ad-hoc conversations about selling, terms and value provide ad-hoc results and foster stress and potential misunderstanding. When asked about your plans simply say “I’m not quite sure”... then write down the person’s name and contact info, and let them know you’ll contact them when you decide your plans. This helps to keep misunderstandings on price, timelines, etc. to a minimum.
Get Experienced, Professional Assistance
The sale of real estate, even to someone you love, is a complex process with many moving parts which can have big financial and relationship consequences. Whether you choose a real estate broker or real estate attorney to help - look for:
Experience - demonstrates understanding of the dynamics of off market sales and their complexities and benefits. (Many real estate brokers and attorneys simply don’t understand these sales at a high level - they can write contracts, but they cannot craft the creative solutions to protect your interests while also getting to your goals.)
Attitude - works to bring parties together toward the common goal without sacrificing your goals. (This is a unique balance best executed with open, transparent communications).
Compensation - don’t be too cheap, as you get what you pay for in these circumstances. The $500 or discount broker (aka the ones that tell you they will give you “full service” for 1%...between you and me, they won’t) will likely deliver services and results scaled to their compensation. This doesn’t mean paying excessively gets you better result - it means you don’t generally find the best and brightest consultants offering their services for the lower prices. Find the right professional for you and then pay a fair wage - you’ll be glad you did.
Ignorance is not bliss - especially when it comes to money. Take the time to get multi-scenario valuations from knowledgeable professional(s) which show the costs and benefits (time, money and energy) to selling off and on market. It’s always helpful to know throughout the process which benefits you are receiving and what costs you are paying for your chosen approach. Even if you are already sure that you are going to sell to your super cool niece, this is a step we recommend and then share that information with her. This helps all parties to be clear on what is being given so that there is clarity and no weird feelings on either side down the road.
Seek creative solutions to finding the optimal solution for all parties. This comes from asking lots of questions, seeking understanding of the needs and goals of all sides and thinking outside of the box (while staying inside of the law). There are ways to give a friend opportunity to purchase your property while not passing up the best possible price and terms for yourself and your family. Likewise there are ways to craft semi-open market sales which respect your privacy or timelines while providing better pricing and terms. I’d get into specifics of some the creative solutions we’ve crafted… however it would take pages of background and still might be misunderstood. Call us, we are glad to share some insights.
Off market sales absolutely have their place in our market, but as with everything just keep in mind that there can be hidden challenges. Reach out to us, talk to us about what you are thinking and we are glad to give you our absolutely honest (like painfully so sometimes…#sorrynotsorry #knownforoverhonesty) feedback. We are always here to help you anyway that we can.