Are Off-Market Listings Costing Home Sellers Money?

If you've been paying attention to real estate news recently, you've probably heard more discussion about off-market listings, private listings, and exclusive inventory.

Some brokerages are promoting off-market listings as a way to create exclusivity and give buyers access to properties before they hit the open market. While there are situations where this strategy can make sense, homeowners should fully understand the potential tradeoffs before deciding to sell their property off-market.

The question every seller should ask is simple:

Will selling off-market help me maximize my home's value, or could it leave money on the table?

What Is An Off-Market Listing?

An off-market listing is a property that is available for sale but is not publicly advertised through the Multiple Listing Service (MLS).

Instead of exposing the property to the widest possible audience of buyers, the listing is often shared privately through a brokerage's network, existing clients, or a select group of agents.

In some situations, this can be beneficial. But in many cases, limiting exposure can also limit competition.

The Biggest Concern With Off-Market Listings

One of my biggest concerns is that some sellers may not fully understand what they're giving up when they choose not to market their property publicly.

When a property is exposed to the entire market, buyers compete against one another. That competition often helps determine what the market is truly willing to pay.

When a property is marketed privately, you're often negotiating with a much smaller pool of buyers.

That raises an important question:

How do you know the offer you're receiving is truly the best offer available?

Off-Market Can Prove You're Overpriced—But Not Underpriced

One of the most important points from our recent discussion was this:

Off-market listings can prove a property is overpriced, but they can't prove it's underpriced.

If a property is offered privately and nobody shows interest, that may be a sign that the asking price is too high.

But if someone quickly agrees to purchase the property, that doesn't necessarily mean the price was correct.

In fact, it may mean the property was worth significantly more than the seller realized.

Without broad market exposure, there's often no way to know.

A Real Lakes Region Example

Several years ago, we represented a waterfront property on Lake Winnisquam.

At the time, we had a buyer willing to pay approximately $1.15 million for the property.

It would have been easy to accept the offer and move forward.

Instead, we advised the seller to expose the property to the open market.

The result?

The property ultimately sold for approximately $1.5 million after receiving multiple offers.

Had the seller accepted the first opportunity, they could have missed out on hundreds of thousands of dollars.

Why Pricing Is So Difficult In The Lakes Region

Unlike many suburban neighborhoods where dozens of nearly identical homes exist, Lakes Region properties are often highly unique.

Small differences can dramatically affect value:

• Waterfront exposure
  
  
• Sunset views
  
  
• Mount Washington views
  
  
• Dock systems
  
  
• Privacy
  
  
• Shoreline quality
  
  
• Renovations
  
  
• Access to amenities
  
  

Because every property is different, determining value isn't always straightforward.

That's why market exposure is often one of the most powerful pricing tools available.

Let The Market Do The Heavy Lifting

One phrase I often use in negotiations is:

"Let the negotiation do the heavy lifting."

The same principle applies when selling a home.

At the end of the day, every listing price is an educated estimate.

The market ultimately determines value.

When multiple buyers compete for a property, sellers gain valuable information and often gain leverage.

They can compare:

• Purchase prices
  
  
• Inspection terms
  
  
• Financing terms
  
  
• Home sale contingencies
  
  
• Closing timelines
  
  

Instead of negotiating with a single buyer, sellers can choose the offer that best fits their goals.

When Off-Market Listings Make Sense

To be clear, off-market listings are not always a bad idea.

There are situations where they may be the right solution.

Examples include:

• High-profile sellers seeking privacy
  
  
• Unique luxury properties
  
  
• Estate sales
  
  
• Properties requiring extensive repairs
  
  
• Situations where convenience is more important than maximizing price
  
  

The key is making sure the seller fully understands both the benefits and the risks before making a decision.

The Bottom Line

Off-market listings have a place in real estate.

But they should be viewed as a specialized strategy rather than the default approach.

For most sellers, the best way to discover what buyers are truly willing to pay is through maximum market exposure.

The more qualified buyers who see a property, the greater the opportunity for competition, stronger offers, and better terms.

Before deciding whether to sell privately or publicly, make sure you understand all of your options and how each approach could impact your final outcome.

Because once a home is sold, there's no way to know what another buyer might have been willing to pay.

Mike Gagnon is a Broker Associate with The Dow Group and serves buyers and sellers throughout New Hampshire's Lakes Region, including Lake Winnipesaukee, Meredith, Wolfeboro, Moultonborough, Gilford, Laconia, and surrounding communities.

"I'm Mike Gagnon with The Dow Group — and if you're making a move around the lake this year, let's make sure it's a smart one."