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Housing inventory has been rising nationally, but some homes never reach the open market. Off-market real estate transactions are property sales that are not publicly advertised or listed on the Multiple Listing Service (MLS). These transactions happen privately, often through direct negotiations between the buyer and seller or with the help of an agent who specializes in such deals.

But just how many deals happen off-market?

To better understand off-market sales, ResiClub reached out to BatchService, a fast-growing property intelligence and technology company. Their data scientists analyzed home sales in their extensive database.

1. Privacy: Sellers may not want their property sale to be public knowledge. This could be for personal reasons, such as avoiding public attention, or because the property belongs to a high-profile individual.
2. Testing the market: Some sellers use off-market listings to gauge interest without committing to a full public listing. This allows them to test pricing and demand.
3. Speed: Some homeowners may need to sell quickly and quietly, perhaps due to financial reasons, divorce, or other personal circumstances. In some cases, off-market sales can expedite the process.
4. Exclusivity: Keeping a property off-market can create a sense of exclusivity, potentially attracting serious buyers willing to pay a premium.

“Divorced couples where one spouse wants to rent back for a while—or they want to avoid friends and neighbors finding out they are selling,” says Riehle. “Homes in major disrepair, where owners spoke to agents who recommended selling off market to investors. Unsophisticated owners who got suckered by a wholesaler. Owners who want to avoid paying commissions, so they call local investors who do direct mailing or TV advertising.”

Sometimes siblings will inherit a house they want split four ways, but they don’t want to deal with the hassle of getting it ready. “They just want a quick easy sale,” Riehle says.

Austin Stowell, real estate agent in Austin, tells ResiClub that these sorts of sales happen frequently in his area: “I don’t think it can be understated the importance of the off-market data,” says Stowell. “So much of Austin trades off-market it would shock you. I’d say 40% of homes over $2 million trade off the MLS.”