What Does Off-Market Mean in Real Estate?

In a hot market with limited inventory, buyers are always looking for a way to beat the competition. They want to make bids that stand out and find hidden gems before others on the market do. This competition is causing more people to search for off-market real estate listings. These might be properties that aren’t listed for sale just yet, or houses that aren’t for sale at all. 

This guide will answer what off-market means and provide strategies to find and bid on these listings. Here’s everything you need to know if you are looking for an off-market property.

What Does Off-Market Mean in Real Estate?

An off-market listing is a property that is for sale but is not on the Multiple Listing Service (MLS) or other public platforms. These could be pocket listings (which means they are exclusive to the brokerage that represents them) or involve private sales. The buyer may want to maintain their privacy during this time, possibly because they have a unique house or are a public figure, like a celebrity or elected official. 

The secondary definition of an off-market listing is when a property is not currently for sale but could potentially be. For example, a house might be listed as “temporarily off market” on platforms like Zillow or preparing to be listed but not public yet. Sellers can pull their home from the market for a variety of reasons. They could have a personal life event (like the birth of a child) that prevents them from moving or may need to make repairs on the property after a storm before listing again. 

Off-market does not mean the house is pending or contingent. A pending or contingent sale is one where the house is on the market but the seller has accepted an offer. Off-market simply means the house is not for sale publicly. 

The number of off-market deals is growing. Studies estimate that 10% of deals happened off-market in 2024. This is because an off-market house is more likely to be distressed. Someone going through divorce or financial hardship might seek out off-market buyers instead of going through the staging, listing, and open house process.

Can You Buy a House That is Off-Market? 

If you can find off-market properties, you can approach the homeowners with bids to buy them. The owners will decide whether they are entertaining offers and are willing to negotiate with you.

There are several reasons why a home is off the market, from personal events in the lives of sellers to privacy needs. The reason why the home isn’t on the MLS could determine the likelihood of the homeowner’s willingness to sell.

Talk to your real estate agent about specific off-market homes you are interested in. 

Types of Off-Market Properties

If you are interested in finding an off-market listing, learn about the different types available. Here are a few ways a house can be sold off the market and why this occurs. 

• Pocket Listings: These are privately sold homes. The listings are “in the agent’s pocket” and only shared with a few select brokers. Pocket listings are often used to protect the privacy of sellers or to allow brokers to share exclusive properties with clients.
• FSBO Properties: For Sale By Owner (FSBO) properties are marketed without agent representation. These aren’t technically off-market sales, but they are harder to find, especially if they aren’t on the MLS. Your Realtor may have to work directly with the homeowner because there is no listing agent. 
• Pre-market Properties: These are properties where the sellers are preparing to list, but the house is not yet on the MLS. If you can find a pre-market property, you could get a good condition house while beating the competition that comes with a traditional listing. 
• Distressed Properties: These include foreclosures, short sales, and properties in financial distress. They might be off-market if they are purchased at a foreclosure auction. Some real estate investors will approach homeowners going through financial distress and offer to buy their properties to avoid foreclosure.   
• Investment Properties: Some companies specialize in finding off-market opportunities for real estate investors. These include distressed homes, potential rentals, and multi-family units. 

You don’t have to look at all of these options to find off-market sales. You may decide to focus your efforts on pre-market properties or ask your agent to look out for pocket listings.

Benefits of Buying a House Off the Market

There are multiple reasons why sellers would consider an off-market listing, at least at first. Buyers can also benefit from exploring their off-market property options. Here are the benefits to both parties to better understand why people do this. 

For Sellers:

• There is privacy if the sale involves sensitive situations. High-profile individuals or homes can list discreetly and only meet with serious buyers. 
• The sellers can test the market without accumulating “days on the market.” This means they can gauge buyer interest and see whether they are likely to get bids.
• Sellers can potentially avoid open houses and constant showings that come with public listings. Instead, they might have a few exclusive showings. Their Realtor will build buyer interest from a select pool of people.
• There might be opportunities for reduced commission structures, allowing sellers to save on the home sale. 
• Sellers have more control over the selling process. 

For Buyers:

• There is less competition from other buyers, making their bids stand out. 
• Buyers can potentially find better deals from non-traditional properties and listings. 
• Buyers can access properties before they hit the market.
• They have more flexibility in negotiations because they aren’t as worried about being outbid. 
• They can potentially find unique properties not found on the MLS. 
• Their relationships with sellers are not influenced by bidding wars. Sellers won’t feel like they can end the deal and find a better buyer within a few days. 

Sellers benefit by listing their properties on their terms, while potential buyers benefit from less competition. In perfect off-market situations, all parties enjoy their ideal real estate transactions.

How to Find Off-Market Listings

With a clear understanding of what does off-market mean, you can move forward with your property search. There are multiple ways to find these homes, from pocket listing services or real estate auction websites.

Here are four steps you can take to effectively explore the off-market environment in your area.

Work with Experienced Real Estate Agents

Off-market homes can be hard to find if your real estate agent isn’t experienced in this field. Interview multiple Realtors and state that you are looking to buy a house off the market. Explain whether you are looking for a rental property or simply want a competitive edge over buyers. You can then gauge their comfort level with off-market homes and discuss how they find these properties. 

A real estate agent might not have experience with off-market listings, but they might be able to refer you to colleagues who do. Don’t underestimate the power of agent networks and relationships. A potential Realtor might be able to connect you to an expert in finding off-market options or have a large enough network to search for pocket listings and distressed properties. Make sure you trust the skills of your agent and their ability to help you find what you need.

Take Direct Approaches

If you have a clear idea of where you want to buy, consider reaching out to homeowners directly. This way, you can find your own off-market property by talking to homeowners who are considering moving but haven’t listed yet. It’s not uncommon for investors to create letter campaigns for homeowners who might be interested in selling off-market. This process takes a lot of work, but could pay off.  

You can also start networking in local communities and meeting neighbors who might know of people who are preparing to move or take the next step in their lives. This allows you to form a strong personal relationship beyond a form letter. When that homeowner is preparing to sell, they might reach out to you directly. 

These steps require patience, but could help you break into the local housing market if your desired region is highly competitive.

Use Digital Resources

You can find specialized real estate websites online that help buyers find off-market listings. There are pocket listing services that cater to exclusive buyers and auction sites for foreclosed homes. Identify the type of off-market property you want and then look for online niches that showcase your options. 

You can also turn to social media groups and forums where people discuss buying and selling off-market properties. This could be a good place to network with other investors and discover home sellers who want non-traditional sales. 

The internet is a great place to boost your knowledge of the real estate industry and get leads on potential listings. You can also speak directly with real estate professionals who are experts in discovering off-market homes. These could be valuable partners to work with in the future.

Tap Into Professional Networks

If you want an off-market house, you might want to hone your networking skills. Not only will you benefit from meeting people across the real estate industry, but you can win people over with your charm so they want to work with you.

Get to know different wholesale real estate professionals and the groups they operate in. Join real estate investment groups both in-person and online. You might even join your local National Association of Realtors chapter to grow your skills. Industry connections are everything in real estate, especially if you are looking beyond active MLS listings.

Challenges and Considerations for Off-Market Listings

Potential buyers who are interested in finding off-market properties have to be aware of the risks that come with searching for these types of homes.

Finding an off-market property isn’t always easy, especially if you have limitations in the types of homes you can buy. Here are a few challenges to consider. 

• Limited inventory and availability: Unlike public MLS listings, private listings are harder to find. It may take longer to find potential houses, especially if you are looking for a luxury pocket listing. 
• Pricing challenges without public comps: It will be harder to determine if the house is priced fairly because there isn’t a comparative market analysis (CMA) to reference. You will need to trust your real estate agent that the home price reflects the fair market value. 
• Potential legal and ethical considerations: While pocket listings are usually legal according to the National Association of Realtors, there are ethical guidelines around using them. Your real estate agent may have rules they follow about seeking off-market properties.   
• Due diligence requirements: The burden often falls on the buyer to do their due diligence on the condition of the home. The buyer needs to make sure the seller will allow an appraisal and inspection to confirm the house is fairly priced and in good condition.
• Financing considerations: Lenders might not be willing to finance off-MLS properties, whether you are looking into pocket listings or distressed homes. You may need to seek alternative funding sources. 

Finding off-market sales will take more work than touring traditional MLS listings. However, some people feel like the search is worth it if they can find their dream home.

Find Off-Market Properties Through Local Real Estate Agents

Once you have a clear answer to what does off-market mean in real estate, you can decide whether you want to search for pocket listings and other unconventional properties. Potential buyers can find unique homes and competitive listings if they are willing to explore off-market options. However, this process isn’t for everyone. Some people might prefer to stick with multiple listing service options and compete in the traditional market. 

No matter the type of listings you want, choose FastExpert to find local real estate agents in your area. Look for Realtors who have experience with off-market listings and who are confident that they can help you search for homes. FastExpert can help you find the properties you need, no matter how you discover them.