US REAL ESTATE MARKET: WHY BUY OFF-MARKET PROPERTY?

 US REAL ESTATE MARKET: WHY BUY OFF-MARKET PROPERTY?

There are several options for purchasing a property in the U.S. real estate market. Buyers looking to stay ahead of their competitors are turning to off-market properties, also known as "quiet listings" or "pocket listings" in professional jargon. These are houses and apartments for sale that aren't listed on multiple listing services (MLS). In other words, the real estate agents selling these properties are searching for buyers on their own.

There was a time when off-market properties were relatively rare. They have gained popularity among buyers in recent years, creating a secondary market that is facing ever-increasing demand.

A new regulation from the NAR (National Association of Realtors), known as "MLS Statement 8.0," aims to restrict off-market real estate listings in the United States. At first glance, these may seem counterintuitive to sellers. Indeed, with demand outstripping supply, this results in endless bidding wars, especially in some of the most popular neighborhoods for investors. Nevertheless, this secondary market is thriving, and sellers are finding it beneficial. For buyers, it's worth considering the following question: why buy off-market real estate?

What is the benefit for sellers of turning to the principle of off-market goods?

Some homeowners choose to try off-market sales as a test. Still others want a more private, confidential sales process and the opportunity to negotiate a lower sales commission, with only one real estate agent involved in the transaction.

Some homeowners believe that listing their property in off-market listings creates a special appeal, positioning their house or apartment as a high-end property. If it's listed and remains on the market for more than 30 days on the MLS, there's a good chance potential buyers will make low offers. With off-market listings, because the information about the number of days the property has been listed doesn't appear, sellers are less likely to be tempted to make low offers.

For buyers, there are many advantages to looking at off-market properties in the US real estate market. First, the potential buyer benefits from access to inventory that other buyers don't see. If your ambition is to purchase a property in a particularly dynamic market, off-market listings are likely one of the only ways to acquire a property. Furthermore, in a "normal" economic climate, buyers can also get a good deal, as the commission payable by the seller is lower.

It's important to remember that not all real estate purchases in the U.S. are necessarily related to the acquisition of a primary residence. Indeed, some buyers are investors looking to make a good deal and then rent out their property or resell it for a good profit. As such, an off-market property in a neighborhood coveted by buyers and real estate investors can be an excellent way to achieve this goal.

Focus on MLS 8.0 and the US real estate market

The National Association of Realtors' adoption of the "MLS Statement 8.0 Clear Cooperation Policy" has presented itself as a significant obstacle to off-market real estate listings. This regulation took effect on January 1, 2020, and its implementation at the local level was made mandatory by May 1, 2020. Through this regulation, any real estate broker participating in a multiple listing service must submit their listing to the MLS within one business day of marketing the property to the public.

Although MLS 8.0 is not a law in the traditional sense, as the National Association of Realtors is a management association and not a legal entity, all MLS members, brokerages, and other association members must comply with this new regulation.

It's important to note that real estate agents who aren't members of the NAR aren't subject to this requirement. However, considering that 89% of recent home buyers used a real estate agent or broker, and that nearly 7 out of 10 licensed real estate agents are NAR members, the practical impact of MLS Disclosure 8.0 is applicable to most residential real estate transactions.

current status of off-market real estate listings

The MLS 8.0 statement doesn't mark the end of off-market listings. It includes options for real estate agents and brokers to continue listing their properties. For example, sellers can choose not to display their property on the MLS, and therefore online. Another option is to list the property as visible only to the real estate agency, thus preserving the seller's privacy. In this case, the agent can share the listing with other agents at the same real estate firm or present it when meeting with potential buyers face-to-face.

Other options previously available through brokers have disappeared with Declaration 8.0. Still others, such as "Coming Soon" or delayed showings, are under the control of local MLSs, but are subject to new restrictions that prevent agents from sharing them with buyers.

Turning to the secondary market, the so-called off-market, to find real estate in the USA while getting a good deal is entirely possible. This requires knowledge of the American real estate market, research, and, above all, the use of a substantial professional network. To facilitate your real estate investment in the USA, turn to a French-speaking professional who can support and guide you according to your needs and objectives. Contact an expert now.