What are the biggest reasons why brokers would give off-market / pocket listings to certain investors?
Seems like the best properties / deals might first be shown to large institutional investors.. is this simply because they will pay the most for the property? Mostly price related?
[{"id": "igjn3c9", "text": "So there\u2019s 1 million reasons. When I represent a building for sale typically, as I ramp up the marketing efforts, I will reach out to other brokers and investors who I know have shown interest in a similar asset in the past. This just makes my job easier because if I can get a solid offer in before we do a shit ton of marketing work then great. \n\nThat\u2019s not to say I won\u2019t take the building to market necessarily, I\u2019ll just get paper on the building a little bit sooner. Also a lot of times some owners just don\u2019t want to publicly market building. It\u2019s a process that can be annoying especially given the tenancy of the building. You also have a ton of tire kickers. A lot of people think they can run with the big dogs sometimes and they waste your time with offers and due diligence. If you know there are valid buyers in your area who don\u2019t waste your time you will deal with them first.", "replies": [], "depth": 1}, {"id": "igjypvu", "text": "Why advertise and deal with tire kickers when you can close a deal asap with a reputable/repeat client at a good price?", "replies": [{"id": "igki6ub", "text": "This.", "replies": [{"id": "igki7tl", "text": "Hey there Uhtred_U! If you agree with someone else's comment, please leave an **upvote** instead of commenting **\"This.\"**! By upvoting instead, the original comment will be pushed to the top and be more visible to others, which is even better! Thanks! :)\n***\n ^(I am a bot! Visit) [^(r/InfinityBots)](https://reddit.com/r/InfinityBots) ^(to send your feedback! More info:) [^(Reddiquette)](https://www.reddithelp.com/hc/en-us/articles/205926439#wiki_in_regard_to_comments)", "replies": [{"id": "igkmfty", "text": "This.", "replies": [{"id": "igkmgtr", "text": "https://i.imgur.com/KrwA19h.jpeg\n***\n ^(I am a bot! Visit) [^(r/InfinityBots)](https://reddit.com/r/InfinityBots) ^(to send your feedback!)", "replies": [{"id": "iglgic0", "text": "Not this", "replies": [], "depth": 6}], "depth": 5}, {"id": "igl0efh", "text": "This", "replies": [], "depth": 5}], "depth": 4}], "depth": 3}], "depth": 2}, {"id": "ign01nl", "text": "To sell at a premium and/or when no reputable investor or repeat client wants the deal", "replies": [{"id": "ign0og9", "text": "Yes that happens sometimes, but in this instance the question mentions \u2018certain investors\u2019 are on standby for deals", "replies": [], "depth": 3}], "depth": 2}], "depth": 1}, {"id": "igk0aay", "text": "Not sure what everyone is trying to say, but the real reason is the broker makes a shit ton of money. I never do this shit and it drives me nuts when others do (usually big name brokerage shops). Long story short, I have an \u201coff market deal\u201d that I fucked over the seller by telling him a price that\u2019s way too low and they believed me. I then take that to \u201cbig boy reit\u201d, they buy it and get a great deal since they don\u2019t have to compete and it\u2019s way under priced. I keep both sides of the fee on that deal and then to show me loyalty, big boy reit lists it with me in 2 years for 75% more\u2026 scummy thing to do imo and total common place for big shops.", "replies": [], "depth": 1}, {"id": "igk1hvg", "text": "Because they can close quickly I. This property and hey have the resources to buy other properties as well. Continued source of business.", "replies": [], "depth": 1}, {"id": "igk2d4h", "text": "I have favors to friends and I need to prove that keeping me in mind is worth it long term.", "replies": [], "depth": 1}, {"id": "igk2ul5", "text": "Others alluded to it, but probability to close is one (A lot of window shoppers and/or a handful people with wherewithal who might be an absolute headache for the seller and seller's broker) Something to be said for not wasting time... That said, I appreciate the flipside and why it could also make sense to go to market. Regardless I like the idea of having competing buyers for the Seller (even if they might be competing pocket buyers)", "replies": [], "depth": 1}, {"id": "igk79lu", "text": "History, reputation, knowledge of the deal making process.", "replies": [], "depth": 1}, {"id": "igk8f1f", "text": "Brokers give off market and pocket listing to specific investors because they know the deal will close. Having a deal go through 2 or 3 buyers just delays their commission. \n\nThis may not be the only reason, but it's one of the top 5", "replies": [], "depth": 1}, {"id": "igk8w4a", "text": "The trust aspect of it is the biggest part. They don\u2019t want to bring any joe schmoes to the table that won\u2019t perform or do something that will make the broker look bad. Also they want to know they won\u2019t get screwed.", "replies": [], "depth": 1}, {"id": "igkcyvb", "text": "Certainty of close while minimizing disruption to operations.", "replies": [], "depth": 1}, {"id": "igkj4in", "text": "Not only institutional. Individuals as well. I\u2019m one. Source: many off market purchases brought to me.\n\nReason: broker is 100% confident that when I offer I can and will close, and without drama.", "replies": [], "depth": 1}, {"id": "igkolfx", "text": "Loyalty and pre existing relationships, favor", "replies": [], "depth": 1}, {"id": "igkor0u", "text": "Just had an $11.5M deal close in 54 days. Buyer owns dozens of similar properties, can and will close in cash, knows how to underwrite a deal like this with his eyes closed, and has a competent team to guide the deal to the finish line. Fastest I\u2019ve ever closed a deal of this size (Buyer was able to accommodate Seller\u2019s expedite timeline). \n\nWhy on earth wouldn\u2019t I bring a deal like this to his attention every single time? If I would have listed it we\u2019d barely be in escrow at this point and I would have had to deal with dozens of boobs trying to compete with a handful of seasoned, experienced buyers. Better buyers = more deals = better buyers = more deals, rinse and repeat.", "replies": [], "depth": 1}, {"id": "igkr23x", "text": "Close the deal with a reliable contact that you know will come through, and also further build that relationship for future deals.", "replies": [], "depth": 1}, {"id": "igkt7w8", "text": "Number one answer, as others have said, is that taking it out to a reliable group allows for a quick close with surety of execution.  Additionally there are tax implications, especially in a sale lease ack scenario where a marketed process could potentially trigger a reassessment.  Along the same lines there is a level of discretion that is afforded through off market deals in both not giving comps to competitors and as a seller not have the typical small town article \u201cxxx sellers their building for $10 MM\u201d and having neighbors looking at them funny.  \n\nAlso if you are a broker that doesn\u2019t think they can achieve best pricing on a off market process you either don\u2019t have a strong enough specialty or don\u2019t know your market well enough.", "replies": [], "depth": 1}, {"id": "igkytvx", "text": "Resi investor here. After a few profitable deals, I got my broker realtor a sizeable gift. Kept up a little with his family, wife, and kid matters enough to follow up at later dates. \nNow a lender he has it good with gets a power of sale straight to his desk, it sits in a pile, and there\u2019s about a half a dozen calls he can make to a half dozen people that morning. I try to stay in that circle. Or hexagon. \n\nHe knows what I like, the size of my appetite, and has a rough idea of how willing I am to enter a new venture, and he knows my mannerisms enough to know how to pitch it to me.", "replies": [], "depth": 1}, {"id": "igmrxyc", "text": "They are repeat clients of the broker.\n\nThe broker wants to close deals to make sure they can earn as much in fees as possible.  If they are likely to be the broker for the sale of the property in 2-5 years then that is their optimal scenario.", "replies": [], "depth": 1}, {"id": "igmsgjd", "text": "Because the brokers know that these investors can close.", "replies": [], "depth": 1}, {"id": "ign0d5e", "text": "They do this to look good with investors and to sell assets fast \u2026 so they call investors to make them feel special as soon as they know a deal is available before it hits the market but if investors  aren\u2019t interested it gets listed to the general public", "replies": [], "depth": 1}, {"id": "ignawl8", "text": "It's the common saying, \"if a deal is listed on the MLS (or other listing sites) then it's not a good deal\" \n\nIn all my prospecting for listings I frequently got the answer of \"I'm not selling, but if you find anybody in this asset class give me a call and I'll buy it\"\n\nWhy would I go through all the hassle of listing it if I already have numerous people willing to make the purchase if the deal is right for them.", "replies": [], "depth": 1}, {"id": "ih0obke", "text": "There are a lot of reasons why this would be the case. Number one is that most of us have clients who continually transact and have become multi-year income streams with an excellent track record of transacting. another reason is that most times these buyers will let you represent them on the buy, run the leasing, and then let you sell their property (and then upleg them and repeat the cycle).", "replies": [], "depth": 1}]