Have you ever noticed how some expressions start off meaning one thing but somehow take on a life of their own? That’s exactly what's happening with the term "off-market" in real estate.

Lately, I've seen this term tossed around in the media with a bit of negativity. The result? Lots of confusion. If you are a potential home buyer or seller, you will want to grab your favorite beverage and head to your comfy chair. Let me walk you through my understanding of what "off-market" properties truly mean.

Off-Market Properties - Let's Get Classical

In real estate, to say that a property is "off-market" is to indicate the status of a property as being "off" the market. In the traditional sense, a property is "off" the market when it gets sold, or when it is no longer available to be shown because it is "in contract".

A property might also be considered "off" the market when it is either temporarily or permanently "withdrawn" from the market. This might happen, for example when it's the holidays and sellers want to temporarily take their home off the market so they can enjoy the holidays with their family and friends. And sometimes, a property is permanently withdrawn because the home seller chooses to no longer sell their home. Alternatively, it could be that the home is not getting any offers and the seller decides to go with a different realtor.

A home might also be "off" the market when the term of the real estate listing agreement has expired, for example, after 6 months. For these reasons, a property that is "off" the market may be viewed as an "off-market" property.

What Does it Mean to be "On the Market?"

Let's shift our focus to understanding what it means for a property to be "on the market." In real estate, a property is "on the market" when it is accessible for potential buyers to view and purchase.

In today's ever-changing real estate landscape, we need to ask a fundamental question: "What exactly is the market?" We know, for example, where to buy and sell shares of a publicly traded company, but identifying where homes are available for sale can be less clear. Some of you might be surprised to discover that there are actually multiple markets where homes can be bought and sold. Are you ready to explore an expanded perspective of the real estate market? Let's delve into the specifics.

Reframing the Real Estate Market

To understand how the term "off-market" properties has evolved, it is essential to first recognize that there are multiple markets, or channels, of residential real estate property for sale. Here are some examples.

1. Multiple Listing Service (MLS)

For many realtors, the traditional place to identify residential properties that are for sale is to go to the website of the local Multiple Listing Service (MLS). This is because it is often the first place that homes are listed for sale. You can think of it as the original source for when a property goes "on the market." Here's how it works. The local MLS is essentially an "aggregator," where realtors enter their property listing information. The MLS then feeds this data to a multitude of public sites. This is how the property data is able to be accessible on numerous websites across the internet. For those of you who are house hunting, no doubt you are familiar with various third-party sites where you can search for homes, such as Zillow, Realtor.com, Trulia, etc.

2. For Sale By Owner

Some homeowners may prefer to begin their home selling journey alone, without realtor representation. These home sellers often list their own home on various internet sites as a FBSO (For Sale by Owner). Anyone who is house hunting can find this additional layer of housing inventory by checking out FSBO properties. These properties are "on the market," but simply not sourced by the MLS

3. New Construction - For Sale by Builder

Let's turn now to home builders. There are a number of builders who focus on developing new communities comprising single-family and/or attached homes and townhomes. For new construction developments, the builders frequently have a dedicated marketing team that advertises these homes for sale directly to the consumer. Sometimes these properties can be purchased prior to completion with customized design options by the buyer. These properties are essentially what I would call, "For Sale by Builder," thereby creating yet another layer of housing inventory not sourced by the MLS, but considered "on the market".

4. Private Exclusives - For Sale by Brokerage

When homeowners make the decision to sell their home, they may find that there is a considerable amount of repairs and home improvement that need to be done to their home. They may also want to do some home staging. And since this all takes time, the homeowner may choose to make the home available as a "Private Exclusive" of the brokerage that their listing agent is affiliated with. In addition, the homeowner has the choice as to whether or not they want their brokerage to "cooperate" with other brokerages and allow for showing appointments.

Some homeowners, however, might not need to do any home repairs or home staging. For these homeowners, the option to list their home with a brokerage as a Private Exclusive also can be very appealing. A Private Exclusive strategy is ideal for sellers who value their privacy and want control over the selling process. With Private Exclusives, sellers can control what information is shared about their property. They can also "test" an aspirational list price to gauge interest, and if needed, make adjustments in the list price prior to going on the MLS. Another key advantage of the Private Exclusive is that if the property accumulates "days on market," (DOM) this will not be visible to the consumer.

Private Exclusives is not a new concept in real estate, as it is something that has been around for years. However the use of the Private Exclusive strategy is gaining increased popularity, especially in light of the "new rules" in real estate that went into effect nationwide last August.

Private Exclusives can benefit would-be buyers as well. In this ultra-competitive housing market, many buyers want to know about properties that they haven't yet seen on multiple listing sites. As the prevalence of multiple offers continues, some buyers are willing to pay a premium price if they can secure the home before it goes onto the MLS, thereby avoiding a potential bidding war with other buyers.

So how do buyers access this additional layer of housing inventory? Home buyers who are working with a realtor can tap into homes that are marketed as a Private Exclusive specific to their brokerage. And if the seller directs the brokerage to cooperate with other brokerages, the buyer agent will have the opportunity to schedule a showing of these additional Private Exclusives as well.

5. Coming Soon - For Sale by Brokerage

A new marketing strategy has emerged and reflects yet another layer of housing inventory that is not sourced by the MLS. And it is accessible to all buyers regardless whether they are currently working with an agent. In fact, these properties are made visible to everyone, including realtors of other brokerages. So what is this new marketing strategy?

This innovative marketing concept is known as Coming Soon and it is currently gaining momentum at Compass as part of our 3-Phased Marketing Strategy. The properties begin as a Compass Private Exclusive and then move to Compass Coming Soon as the second phase. Phase 3 is going onto the MLS. Compass Coming Soon essentially extends the marketing runway of the Private Exclusive for sellers without accumulating days on market and without showing any price drops. By going onto the Compass website (Compass.com), consumers and agents can search the website to see a layer of housing inventory before it goes onto the MLS. This is not a hidden level of inventory, but rather quite the opposite. It is consumer searchable with the click of a button on the Compass website. At Compass, we "co-broke" with everyone.

Thus, as illustrated above, there are multiple channels of housing inventory. These properties are all "on the market" depending on which market you are looking at. Let's return now to the concept of the "off market" properties that has prompted this article.

Off-Market Properties vs. Off-MLS Properties

Let's be consistent with the meaning of an "off-market" property. When using the term "off-market" property, let's use it to mean properties that are not available to be viewed or purchased. It is a property that has been taken off the market for any of a variety of reasons as discussed above.

Many properties that have been referred to by others as "off-market", are in fact, not off the market at all because they can be viewed and purchased through alternative avenues. So please join me in choosing a different phrase when referring to properties that are not on the MLS and simply call them, "off-MLS" properties. As shown above, properties not on the MLS can still be "on the market," just a different market from the MLS.

Private Exclusive - Debunking the "Double-ended" Myth

It is possible that some real estate properties get marketed and sold without ever going onto the MLS. As discussed above, such properties might include Private Exclusives as an alternative marketing strategy available to homeowners who may prefer not to go immediately onto the MLS. This strategy is not much different from the movie industry where a new film has a "movie trailer" in advance of going into theaters. thereby building excitement and momentum among potential movie-goers.

During this "momentum" stage, some Private Exclusives ("off-MLS" properties) may attract a home buyer that leads to an accepted offer. Yet, did you know that even though the home is marketed as a Private Exclusive, that a home seller may have agreed to "cooperate with other brokerages?" This means that realtors across all brokerages can show the seller's home even if it is a Private Exclusive. Therefore, it is not uncommon for other brokerages to sell a home marketed as a Private Exclusive.

To provide insight about whether brokerages who have a Private Exclusive listing are also bringing the buyer and thus "double-ending" the transaction, I analyzed the number of homes that were sold as Private Exclusives in 2024 in Northern New Jersey.

As illustrated in The Minken Housing Index chart below, Private Exclusives (across different brokerages) are cooperating with other brokerages. Private Exclusives that were sold in 2024 represent a very small number of the total number of homes sold.

Analysis of the Private Exclusives sold in 2024 in Northern New Jersey reveals that the buyer was represented by a different brokerage in 25% to 63% of sales. This might be viewed as eye-opening for those who thought that Private Exclusives might be a way to hoard inventory and "double-end" the transaction.

The data presented below clearly demonstrates that home sellers opting for the Private Exclusive strategy are successfully finding buyers through collaboration with other brokerages. It's simply another avenue for home sellers.

The Many Layers of "Off-MLS" Housing Inventory

In the dynamic realm of real estate, it's crucial to be able to differentiate between "off-market" and "off-MLS" properties. As outlined in the beginning of this article, there are many layers of "off-MLS" housing inventory, Each of these multiple channels through which properties can be marketed serves different strategic purposes for sellers and buyers alike.

While some might initially perceive "off-MLS " listings as limiting, they actually offer unique expansive advantages. As illustrated in the 2024 data chart by The Minken Housing Index, a significant portion of Private Exclusives are sold with buyer representation from different brokerages, thereby highlighting the ongoing collaboration within the real estate community. This underscores that off-MLS options, such as Private Exclusives and Compass Coming Soon, are not about restricting access. To the contrary, they provide a diverse range of seller strategies as well as increased buyer opportunities. If you are house hunting, these additional layers of inventory can be key to finding your dream home. And you might just avoid a potential bidding war with competing buyers!

These strategies foster a flexible and inclusive market, providing home buyers with multiple layers of housing inventory to explore. Both Private Exclusives and Compass Coming Soon represent an additional avenue for home sellers. They provide the home seller with privacy, control over property data and insights, as well as the ability to extend the "marketing runway" and test the market without accumulating days on market. If you are considering selling your home, you have choices as to how you would like to market your home. Selecting a marketing strategy that best aligns with your real estate goals and needs can make all the difference.

If you would like help navigating the complex real estate market smoothly and productively, or if you have any questions, you can reach out to me at [email protected].

Did you miss my previous articles about the role of the "rockstar" realtor for home buyers and sellers?

Simply click on the hyperlinks:

Above and Beyond Opening Doors: The Multi-Faceted Role of the "Rockstar" Realtor for Home Buyers

Above and Beyond the Sign in the Ground: The Multi-Faceted Role of the "Rockstar" Realtor for Home Sellers

Discover how I dubbed the term "rockstar" realtor. As one of my buyer or seller clients, you will receive tailor-fit strategies and enjoy an elevated experience with expert guidance throughout the real estate process and beyond.

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Demystifying "Off-Market" Properties: What Home Buyers & Sellers Need to Know

March 2025

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