Off Market Properties used as Agent Traps
TLDR - So, a real estate agent tells you they have off market properties. All you have to do is commit to using the agent and you're on your way to buying a house without any competition. Right?
The answer is no, you haven't found Willy Wonka's Golden Ticket to getting into a home. Instead, our survey found that agents are telling buyers about a house a few hours before it hits the MLS, which unfortunately won't help you much. Instead this is a slimy way for an agent to get you to commit to them.
You meet an agent that tells you they have off market properties (or pocket listings) they can send you. All you have to do is commit to using the agent to represent you and you're on your way to buying a home without any competition. Right? If only it was that easy.
Too good to be true?
We've heard about this countless times from homebuyers. Outside of the rare occasion, real estate agents aren't being completely honest with homebuyers, and they're using the allure of off market properties to get you locked into representing you.
Just think about it... outside of celebrities and politicians that want to protect their privacy, why would a seller want to sell their home off market? Sellers want as many people looking at their home as possible to increase the likelihood of one or multiple offers.
So, what is the agent telling you?
Our homebuyer survey found that agents are telling their buyers about a property a few hours before it's on the MLS for the rest of the public to see. According to the National Association of Realtors (NAR) Clear Cooperation Policy, pocket listings (i.e. for-sale homes that a listing agent doesn't put on the MLS and uses word of mouth or other networks to market the property) are illegal.
All agents must submit the listing to the MLS within one business day of marketing the property to the public. In this case, the agent is using the 1 day gap to tell you the property is for sale before everyone else knows.
Could it help knowing a property will be on the MLS in a few hours?
There is no real value in knowing a property is "about" to hit the market. Even if you plan on placing an offer right away, the seller will want to wait to understand the level of interest on their house from the public before they go under contract with your offer.