How to find and access off-market properties

You’re in the market for a new real estate investment, but struggling to find a diamond in the rough among current listings. You’ve scoured online sources and attended countless open houses, but nothing seems to meet your criteria. Don’t worry — there are other options out there. You just need to prospect properties that are off-market. While off-market properties may not be as well-known as other types of real estate, they can be a great investment opportunity for savvy buyers who now where to look.

What are off-market properties? 

An off-market property refers to a property that’s not publicly posted or advertised on the open market. It’s typically not listed on multiple listing services (MLS) or real estate websites. Instead, these homes are privately marketed and sold through other channels and may not even be actively available,

Off-market properties are typically marketed through word-of-mouth, personal networks, and relationships between real estate agents, brokers, and their clients — if at all. This exclusive nature of off-market properties can create a sense of exclusivity and limited competition, which may be appealing to real estate investors.

Off-market properties are often sought after by buyers who are looking for exclusive or unique opportunities. These homes may be available for sale due to various reasons, such as the owner's desire for privacy, the property being a distressed sale, or the owner testing the market before listing it publicly.

While there’s some risk involved in prospecting off-market properties and homes, there’s also a high potential for reward. You really never know what hidden gems you might find.

Should you buy an off-market property? 

Wondering whether it’s a smart financial move to invest in an off-market property? The answer isn’t a simple yes or no; it depends on several factors:

First and foremost, take into consideration your budget and your requirements in terms of size, home location, and amenities. Then, you need to assess if the property meets your investment goals or long-term vision. (If you plan to rent out the property, use the 1% real estate rule to figure out if the price is right.) While you may be excited by a home with a great view or updated features, keep your budget in mind and think carefully before you seal the deal.

When weighing whether you should buy an off-market property or not, another important factor is the reputation and credibility of the seller or the real estate agent who’s facilitating the deal. You want to make sure you're not getting scammed or buying a property with unknown legal or structural issues. Moreover, you need to be prepared for the negotiating process, which can be challenging when the property isn’t listed publicly. (That’s why it’s all the more important not to forgo a Realtor when buying a house.)

Potential drawbacks of buying off-market properties

• Limited options: The pool of off-market properties is smaller compared to traditional listings, which means there may be fewer options to choose from.
• Hard to find: It can be challenging to identify and access off-market properties since they are not widely advertised. This requires extra effort and networking to discover suitable opportunities.
• Lack of transparency: Off-market transactions may involve less public information, making it essential to conduct thorough research and due diligence to ensure the property's condition, market value, and legal status.
• Pricing and negotiation: As off-market properties are often sold privately, determining fair market value can be more challenging. Negotiations may also differ from traditional transactions, requiring strong communication skills and a thorough understanding of the seller's motivations.

Investors who are comfortable navigating off-market challenges and unknowns will find themselves in a position to make a deal. However, if you’re new to real estate investing or don’t necessarily understand the process of buying off-market, it’s wise to seek help or consider keeping your searches to the MLS. 

10 tips for finding off-market properties

Looking for a property off-market can feel like trying to find a needle in a haystack. It can be time-consuming and frustrating, but don't worry — there are some proven strategies that could help you in your search. Here are 10 tips that can put you closer to off-market success:

Networking

One of the most effective ways to find off-market properties is to build a strong network within the real estate industry. Attend local events, join investor groups, and connect with real estate professionals in your area. When you establish relationships and trust with industry insiders, you may gain access to word-of-mouth referrals for off-market properties. Keep in mind that many off-market transactions happen quietly, so being in the right circles can make a big difference.

Real estate agents and brokers

Another option for finding off-market properties is to engage with experienced real estate agents who specialize in your target market. They often have access to homes before they’re listed on the market and can provide valuable insights and connections. Even if they don’t have a property that meets your criteria right away, they can keep an eye out for opportunities and alert you when something comes up.

Direct mail campaigns

Developing a targeted marketing campaign can also be a way to find off-market properties. By sending personalized letters to property owners in your desired area, you can express your interest in buying off-market properties and include your contact information. Be concise and friendly in your messaging, and avoid sounding like a spam email. This approach can be especially effective if you’re looking for a specific type of property, like a fixer-upper or an estate sale.

Online platforms and databases

In today’s digital age, there are a variety of online platforms and databases that cater to off-market properties. Some websites connect buyers directly with sellers who prefer to keep their listings private. These platforms often require membership or subscription fees, but they can be worth the investment if you’re serious about finding your dream home. Make sure to do your research and read reviews before signing up for any online service.

Local advertisements 

Another strategy for finding off-market properties is to keep an eye on local newspapers, community bulletin boards, and online classifieds. Some property owners may prefer advertising directly to the local community rather than listing publicly. Look for keywords such as “private sale” or “off-market” in the description. Don’t be afraid to reach out and inquire about a property—the worst they can say is no.

Drive or walk around

One of the oldest tricks in the book is to simply drive or walk around your target neighborhoods and look for signs of distressed or vacant properties. Sometimes, owners are more willing to sell off-market if they are approached directly. (It may be helpful to get to know your neighbors.) Take note of properties that look unoccupied or need repairs, and try contacting the owner or leaving a note expressing your interest. This approach requires more legwork than some of the other methods, but it can also be the most rewarding.

Public records and auctions

One way to find off-market properties is by looking at public records, such as foreclosure filings or tax delinquencies. These public records can help you identify properties that may be off-market, but are available for purchase. Additionally, attending foreclosure auctions or tax lien sales can potentially help you find properties that are off-market. This is a great strategy for those who want to find great deals and are willing to put in the work.

Property wholesalers

If you don't have the time to research public records or attend auctions, then you can connect with real estate wholesalers who specialize in sourcing off-market properties. These wholesalers often have a network of property owners and can present you with investment opportunities that you might have never found otherwise. This is a great option for those who want to save time and be introduced to properties that match their criteria.

Social media and online communities

Another way to find off-market properties is by joining real estate-focused social media groups, forums, and online communities. This is a great opportunity to engage in discussions, seek advice, and stay alert for potential off-market deals shared by other members. This is also an excellent opportunity to connect with other like-minded individuals and build your network.

Private networks and exclusivity

Establishing relationships with local developers, attorneys, accountants, and other professionals who may have access to off-market properties can be a goldmine. Sometimes, listings are shared within private networks before being marketed publicly. By creating relationships, you can be the first to know about these deals and act quickly. This is a great strategy for those who want to be ahead of the game and have the resources to build relationships.

Start your search for a great off-market property

Whether you’re looking for a home for yourself or an investment property, finding the perfect one can be challenging—but the effective strategies listed above can increase your chances of discovering a true winner. Remember to be patient, persistent, and open-minded, and you’ll be well on your way to finding a great property that checks all the boxes.

Keep in mind that buying an off-market property comes with potential pitfalls. Do your homework to make sure you’re comfortable with the process—and if you’re still uncertain, align yourself with an expert who can give you peace of mind about your decision to pursue an unlisted sale. 

FAQs

Here are more details about finding off-market properties

What does off market properties mean?

Off-market properties refer to real estate listings that are not publicly advertised or listed on Multiple Listing Services (MLS) or other traditional platforms. These properties are often sold directly by the owner or through private networks, making them less visible to the general public.

Why would someone sell their property off-market?

There are several reasons why sellers choose to sell off-market. Some sellers prefer privacy and discretion, especially high-profile individuals or those who want to avoid public attention. Others may believe that an off-market sale will attract serious buyers who are willing to pay a premium price. Additionally, sellers who have a pre-existing relationship with a potential buyer, such as a family member or friend, may choose to sell off-market to simplify the transaction process.

How do you access off-market properties?

To access off-market properties, you’ll need an in. Build a strong network of real estate professionals, including agents and brokers, who have connections to property owners. Working with experienced professionals and staying proactive in your search will increase your chances of accessing off-market opportunities. You can also check out online platforms and databases that focus on off-market listings and  attend real estate auctions. 

Are off-market properties a good investment?

Off-market properties can present unique investment opportunities. Since these properties are not widely marketed, there may be less competition from other buyers, potentially leading to a lower purchase price. Additionally, off-market properties often allow for more direct negotiation with the seller, providing the opportunity to secure favorable terms. However, it's important to conduct thorough due diligence, including property inspections and assessments, to ensure the investment aligns with your financial goals and requirements.