In the real estate industry, an “off market property” refers to a property that sells without ever being publicly marketed for sale. The seller either advertises the property privately to a select group of potential buyers or negotiates with the buyer directly without ever advertising the property for sale.
While a fee agreement between the property owner and the broker is still usually signed, there is no “listing” agreement. In fact, the objective is not to show the property to the entire market, but rather to a handful of “very qualified”, targeted buyers that the broker knows personally.
Marketing material tends to be sparse and often excludes many of the key facts that a potential buyer would need to fully determine interest in buying the property. A confidentiality agreement needs to be reviewed by attorneys and signed before sensitive information like financing, appraisals, market studies, operating statements and rent rolls are turned over to the potential buyer.
In an off-market transaction, a broker’s role is to identify and discuss the property with the “best” buyers for that particular property rather than the entire market. In many cases, a seller will restrict the list of potential buyers or require that the broker register each potential buyer.