How to buy a house that is not for sale: A guide to finding and buying off-market properties

When preparing to buy a house, it can be fun to look at online listings and compare which houses you like best. But what if you find a home you love that isn’t currently on the market?

If you work with a qualified real estate agent and are willing to think outside the box, you may be able to buy a house that isn’t on the market. This article will explain how to buy a property that isn’t for sale and the pros and cons of this strategy.

How to decide whether to buy a property that is not for sale

It is possible to buy a house that isn’t listed for sale, but is it the best course of action? Let’s look at some pros and cons of this tactic.

Pros of buying a property that’s not for sale

Here are some benefits of buying a house that isn’t on the market:

• More inventory: In a seller’s market, there are fewer homes to choose from. If you can find homes that aren’t listed yet, buying a house that’s not for sale can expand your options.
• Less competition: If you ever found a house you loved and got outbid by another buyer, you know how frustrating it can be. One of the advantages of buying an off-market house is that it’s less likely you’ll be competing against other interested buyers.

Cons of buying a property that’s not for sale

Here are some downsides you should consider before trying to buy off-market listings:

• Increased difficulty: It can be challenging to find an owner willing to sell a home they haven’t listed.
• Speedier process: You have to act fast, especially if you found the house through a pocket listing (a private listing).

How to buy a house that’s not for sale

You can begin the process after you’ve weighed the pros and cons and decided that an off-market listing is the best path toward your dream home. Here are five steps to walk you through purchasing a house that’s not for sale.

1. Partner with a REALTOR^®

The best way to find unlisted properties is by partnering with a qualified REALTOR^®. They can help you research potential homes, approach current owners and negotiate fair prices. These tasks can be completed more quickly and easily with the guidance and expertise of a professional.

2. Look online

Consider using online resources like Facebook and Zillow to find information about off-market homes. If there’s a particular neighborhood you’re looking to move into, you may be able to use Facebook to learn about interested sellers.

3. Talk to homeowners

Your real estate agent can send mailers, call or speak to homeowners about the possibility of selling their home. For instance, they can send a direct mailer inviting a homeowner to get in touch if they’re interested in selling their home.

4. Check expired and pending listings

Another option is to look through expired and pending listings. Expired listings are home that sat on the market with no activity, and the listing contract expired. A pending listing means the buyer has accepted an offer, but the home hasn’t sold yet.

You may be able to contact the seller and submit an offer on an expired listing. If you find a pending listing, it may be possible to submit a backup offer.

5. Make an offer

If the house you love isn’t for sale, consider sending an offer letter to the homeowner. There are steps you can take to make an offer that will maximize the odds of your success:

• Make sure you’ve found a lender and are preapproved so the homeowner knows your financing is secure.
• Work with a qualified real estate agent – if you approach the homeowner on your own, they may not take your offer as seriously.
• Know how much you can afford – calculate your maximum budget for the home price, the monthly mortgage payment and the down payment.
• State any contingencies, like a home inspection or appraisal contingency, upfront.
• Negotiate with the homeowner to arrive at a price that works for everyone.

Tips for approaching the owner of a home that’s not for sale

When approaching the owner of a home that’s not for sale, you need to be strategic and cautious. Keep some of these tips in mind when you’re ready to approach the owners:

• Work with an agent: Working with a real estate agent can help you sidestep some legal obstacles you may encounter and help you craft a strong proposal an owner will take seriously.
• Write a letter: Before making a legitimate offer on an off-market property or meeting with an owner, work with your agent to write a compelling letter to the owners. The last thing you want to do is overstep or rub owners the wrong way.
• Offer the right amount: Your agent should generate a comparable market analysis (CMA) to help you understand how much a home is worth. You can use the data to decide on an offer amount that makes selling worthwhile for the owner.

How does the MLS statement 8.0 Clear Cooperation Policy affect buying an off-market property?

In the past, people would buy off-market houses by searching for pocket listings, which are private listing networks. Agents would sell homes through their connections rather than the open market or list them on the multiple listing service (MLS).

Pocket listings allowed certain home buyers to see and buy a house before it got on the market. Real estate agents used this “coming soon” property window of opportunity to make an off-market sale.

The MLS Statement 8.0 Clear Cooperation Policy prohibits pocket listings, which may make off-market properties less common and harder for potential buyers to find. The policy states that listing agents must submit a listing to the MLS within 1 business day of marketing the property to the public.

The reasoning behind the policy is that pocket listings and “coming soon” properties limited the scope of exposure a home got, preventing a big pool of potential buyers from seeing all available houses on the market.

The bottom line

You traditionally wouldn’t be able to buy a house that’s not listed for sale – but it’s possible. You can increase your home buying options by working with a qualified real estate agent and thinking outside the box. If you’re ready to buy a home in the coming year, get started on the approval processwith Rocket Mortgage^®.