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3 Reasons to Avoid Off-Market Deals in Your First 2 Years as a Commercial Real Estate Agent

By
Edward Caballero
 | 
August 23, 2021

Look I get it. I’ve been there too. You’ve been in the business for 6 months and you have zero listings and zero closings. You’re starting to wonder if there’s an easier way. You’re starting to question whether this business is even for you? All of your close friends are making fun of you because they’re using their degrees and have a base salary and you don’t.

Then, the following day after spending all night praying to the listing gods, something happens. You cold-call someone who says he’s willing to sell his shopping center on Wilshire for $9M, but won’t give you a rent roll or listing! Eureka! You feel like you’ve made it because you have a $9M pocket listing. You calculate the commission in your head. What is that, like 6%? You start spending the money in your head.

Before you get ahead of yourself and commit to the beach house in Cape Town, here’s 3 reasons why you shouldn’t work on off-market deals your first 2 years.

1. The Competition Is Out There

Whether you admit it or not, you have competition out there that have been doing this far longer than you and are better than you. This won’t always be the case. But for the time being, they are. Also they probably already have a relationship with that property owner. You can’t spend 20 years in the business without knowing everyone in the area.

When a property owner truly wants to sell, they take a very strategic approach. Most of the time it involves calling the brokers they have relationships with and consulting with them. If the broker they normally work with didn’t get the listing, there is usually a reason. When they want to sell, it will eventually hit the market regardless of the broker. When they truly aren’t sellers, they usually waste the time of new agents that don’t know any better by giving them an unrealistic price.

2. You Don't Know How to Identify Value

Knowing what a good deal looks like takes time. It takes a lot of study, practice, and experience. If we could identify value just by looking at comps, we would all be millionaire investors. But the actual education happens behind the scenes. The real value of a deal is what you can’t see on the surface. Since you don’t know how to identify value, chances are you’re most likely wasting your time with something that is overpriced.

3. You Don't Know All the Players in Your Territory

You don’t know who all the buyers are in your territory yet. Finding them takes time. A lot of time. Building relationships and trust takes even more time. You could spend your time scavenging through comps to find buyers, or you can let that process naturally unfold when you get your first listing and put it on the market. The buyer leads start coming to you, and you have instant trust as an agent with a listing on the market.

Plus, if you’re only calling buyers to pitch a deal to them, you’re not maximizing the value of the conversation. I’ll do another post on this.

To understand more on how I came up with these 3 reasons, check out my blog post next week on “Real Stories of Off-Market Sellers.”

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