REAL ESTATE
A Closer Look at Off-Market Deals The practice is particularly popular for trophy properties… and it may become more prevalent
For high-net-worth sellers desiring privacy, offmarket deals can offer a swift and seamless sales process that eliminates the need for open houses and showings. For buyers, they can mean running up against less competition and fewer bidding wars. These deals are not listed in traditional public channels such as the Multiple Listing Service and either reside on agents’ private lists, which are made available to select clients, or change hands privately, owner to owner. Since most fall under the former category, an in-the-know agent is more important than usual.
“At The Agency, we believe in giving our clients options and the freedom to choose the approach that best suits their needs." MAURICIO UMANSKY, FOUNDER & CEO
"When it comes to high-end, multi-million-dollar properties, off-market deals provide privacy and exclusivity for sellers while allowing buyers a chance to avoid the competitive pressures of public listings," says Mauricio. "However, policies like Clear Cooperation run the risk of limiting those choices. Above all, I advocate for policies that have built-in flexibility and allow our clients to navigate the market on their terms." In a real estate market with pent-up demand and not enough listings—which describes much of the world at the moment—off-market listings can help alleviate some stress for those who’ve been waiting on the 40
sidelines to buy. For example, in Salt Lake City, where demand continues to outstrip supply in the luxury market, off-market deals are happening much more frequently than they have in the past. “People are flocking to Utah, and when we get a buyer, we almost immediately look for off-market properties,” says Joey Sutorius, a Managing Partner at The Agency Salt Lake City. “We pull up properties and send out letters to homeowners” to find them, he says. He notes that the combination of price, privacy and ease of the arrangement are the main enticements. So is the fact that the public cannot see how long the property has been on the market, a key factor because luxury estates typically take longer to sell. Plus, “off-market transactions are amicable transactions— there’s no pressure on the buyer to make a quick decision,” Sutorius says. Adds Sam Palmer, an agent at The Agency Beverly Hills, money is not always a motivator in such sales. “Typically, these types of owners aren’t desperate to sell,” he says. “But if approached, they may say, ‘I paid $20 million for it last year, and if I can get $40 million now, I’ll sell.’ And buyers expect to pay a little bit of a premium for a special property.” Because most off-market deals involve luxury properties, it goes without saying that a bargain isn’t a top priority for prospective buyers. “These deals don’t work for every property,” Palmer says. “It has to be a trophy asset that people know about and want to buy.”