The term "off-market" has become dangerous.

Many buyers—usually inexperienced—believe that an off-market deal is more likely to be a good deal.

The truth is, it's usually the exact opposite.

Sophisticated sellers love selling their properties to less sophisticated buyers. They don’t need to go to market to accurately value their property—they live the market trends and know exactly what they can get on the open market.

As a result, "off-market" has largely become a way to lure the unsophisticated into overpaying.

By unsophisticated, I don't mean less smart or not financially savvy -- it just means you are newer to the asset class.

If you’re a newer buyer of strip malls, for example, and you’re pitched an "off-market" deal, you need to ask yourself how this is possible.

Longtime brokers in each market know who the experienced buyers are—the ones they’ve sold deals to for decades. 

So why would they bring you a deal instead of them?

If the deal is good, one of those buyers will close on it quickly. Why would you, as a new and unestablished buyer, be chosen over someone with a proven track record?

The answer is: you’re probably missing something—and the price is likely far too high.

I also think we’ve lost the definition of "off-market."

A deal isn’t off-market if it was sent to "a select number of buyers."

It’s not off-market just because there isn’t a sign on the property or it’s not listed online.

Unless they are deeply experienced, when someone tells me they’re buying a deal off-market, I know the chances are high that they overpaid.

Yes, "off-market" is the new "above-market."

And it’s a very smart sales tactic.

Caveat emptor -- let the buyer beware.