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- A lot of home sales are happening off-market—just look at this map
A lot of home sales are happening off-market—just look at this map
To understand off-market sales, ResiClub reached out to the data pros at BatchService, a fast-growing property intelligence and technology company.
Lance Lambert
August 22, 2024
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Off-market real estate transactions refer to property sales that are not publicly advertised or listed on the Multiple Listing Service (MLS). These transactions happen privately, often through direct negotiations between the buyer and seller or with the help of an agent who specializes in such deals.
But just how many deals happen off-market?
To better understand off-market sales, ResiClub reached out to the data pros at BatchService, a fast-growing property intelligence and technology company. Their data scientists analyzed home sales in their extensive database.
In total, around 1.2 million U.S. home sales this year have been done off-market, according to an analysis by BatchService. That includes 175,363 in Texas, 123,637 in Florida, and 62,923 in Georgia.
Why do some sellers opt for off-market transactions?
Privacy: Sellers may not want their property sale to be public knowledge. This could be for personal reasons, such as avoiding public attention, or because the property belongs to a high-profile individual.
Testing the market: Some sellers use off-market listings to gauge interest without committing to a full public listing. This allows them to test pricing and demand.
Quick sales: In some cases, sellers may need to sell quickly and quietly, perhaps due to financial reasons, divorce, or other personal circumstances.
Speed: In some cases, off-market sales can expedite the process.
Exclusivity: Keeping a property off-market can create a sense of exclusivity, potentially attracting serious buyers willing to pay a premium.
To better understand the off-market space, ResiClub reached out to a few industry pros across the country 👇
“Typically, it [an off-market seller] is someone in need of speed, conscience or specific circumstance. Divorce couples where one spouse wants to rent back for a while. Or they want to avoid friends and neighbors finding out they are selling. Homes in major disrepair, where owners spoke to agents who recommended selling off market to investors. Unsophisticated owners who got suckered by a wholesaler. Owners who want to avoid paying commissions so they call local investors who do direct mailing or TV advertising. Convenience not conscience. Family inherits a house, split 4 ways. Siblings don’t want to deal with the hassle of getting it list ready. They just want a quick easy sale… We are buying 2 off MLS right now and 3 off-market. Selling 5 in MLS, 1 off-market. I suspect that’s a pretty typical for us monthly.”
“I specialize in sourcing off-market deals, primarily for investors in the Detroit market. We typically double close our deals and then act as boots on the ground for the investor, getting them through the rehab. Essentially, we allow out-of-state (and country) investors execute BRRRR [buying, renovating, renting, refinancing, and repeating] deals from afar.”
“We bought a 24-unit apartment in east Tennessee off-market from a woman wanting to retire. She wanted $1M and had zero interest in top dollar or listing it. No hassle. She had a few odd stipulations like a tenant who had been sick we agreed to not raise her rent. We ended up selling for much more a year later. And she congratulated us. In fact we still stay in touch… In Nashville off-market accounts for ~20% of transactions. I did an analysis comparing Davidson County single-family home transactions to Realtracs MLS data. Many seem to be flips/investment from what I can tell. So they end up hitting the MLS at some point.”
“I don’t think it can be understated the importance of the off-market data. So much of Austin trades off-market it would shock you. I’d say 40% of homes over $2M trade off the MLS.”
Some notes on the BatchService methodology:
According to BatchService, if a property was sold most recently on-market (YTD), they marked it as an on-market sale. This means the MLS sold date is after the assessor recorded the sold date. If an assessor (off-market) sale was after the on-market sale (MLS) but within a 45 day window they considered it on-market sale as it takes a few days for assessor data to get updated and we account for it. If they don’t have a MLS listing and only an assessor sale event in YTD then it is an off-market sale.
An analysis like this will always have some degree of margin of error. In ResiClub’s view, we see this analysis as a proxy for the off-market sector.
ResiClub PRO members got these 3 additional data articles over the past week:
