Brooklyn Secret Agent: Off-Market Sales

Today we bring you the 15th anonymous weekly column about real estate by one of the most experienced agents in Brooklyn:
Well, it has come to this. Inventory is so tight that we brokers are scrounging for listings by going to people who hadn’t considered being sellers at this time and begging them to consider a deal. Is this a good thing? Maybe, maybe not.

The best place to start is with a buyer who has very specific needs and a clear budget. Without this in mind it can be very difficult to entice a seller. This buyer must also be able to make decisions fast without having to visit many, many properties. Let’s say we have a family relocating from London who lived in Brooklyn before. They’ve got the cash to avoid a mortgage and they want a prime neighborhood. This is an ideal situation to lure a seller into action.

Perhaps we have been in conversation with the owner of a prime townhouse for some time. They have been complaining about rattling around the big old place and feeling oppressed by the maintenance an old house needs. It is a good time to approach them with a specific sales price in mind for this one customer. Of course, it has to be a price that is supported by recent sales and that reflects the condition of the house. If it is appealing, we propose bringing London family, and only London family, in for a look.

Ideally, before this showing, both parties need to sign an agreement stating that this listing is only available to this buyer and the required New York State disclosure forms laying out who is representing whom. When I’ve done this I always explain to the sellers that we won’t be sure we got the best price if we don’t give all buyers a chance. Their response is usually that they can’t bear the thought of the whole world in their home. Conversely, the buyer will not be sure of the best pricing either but at least they get bragging rights for having bought a house “privately.”

These off-market deals usually are more beneficial to the seller — they have the upper hand since they really were not looking to sell just then. But in a highly competitive market like today’s, it can be to the buyer’s benefit not to have to compete against other buyers. In either case, it is critical that both buyer and seller are informed of the possible risks and rewards of an off-market deal.

In the next few months you are going to see a lot of recorded sales for properties that were never listed. Now you know why.