When it comes to selling a mobile home park, most owners immediately think of listing it with a broker or online. But there’s another option that can be equally effective, depending on your goals: selling off-market. Off-market, or private sales, mean that your park isn’t listed publicly but instead sold through direct negotiation with a buyer. This approach has its unique pros and cons, and understanding them can help you decide if it’s the right fit for your situation.
Here’s a closer look at the benefits and potential pitfalls of off-market sales, plus some insights to help you make an informed decision for a successful transaction.
1. Privacy and Confidentiality (aka, “Keeping Your Business Under Wraps”)
One of the biggest perks of selling off-market is privacy. When you list a property publicly, details about the park, the sale price, and sometimes even your financials can become public knowledge. Off-market sales allow you to negotiate privately, keeping the sale quiet and under control.
Example: If you’re selling to avoid alarming tenants or competitors, an off-market sale can minimize disruptions. Tenants may not even be aware that the park is for sale until the new owner takes over, keeping operations running smoothly.
Takeaway: Off-market sales are ideal for owners who prioritize confidentiality and want to avoid unwanted attention. By keeping the process private, you control what information gets shared and when.
2. Lower Costs (or, “Saving on Commissions and Fees”)
One clear advantage of a private sale is the potential to save on commission fees. When you sell through a broker, expect to pay a percentage of the sale price as commission. In an off-market transaction, however, you may bypass those fees entirely, particularly if you connect with the buyer directly.
Example: Selling a $2 million park through a broker with a 5% commission rate means paying $100,000 in fees. With an off-market sale, you can retain that amount or use it to negotiate a better deal.
Takeaway: If you have connections to potential buyers, selling off-market can save a significant amount on fees. However, keep in mind that selling privately may require more legwork on your end if you’re handling negotiations solo.
3. Faster Sales Process (aka, “Skip the Listing and Get to the Deal”)
In a public sale, listing, marketing, and coordinating viewings can add months to the process. Selling off-market can speed things up, especially if you already have a buyer in mind or have received direct inquiries from interested parties.
Example: Suppose you’re ready to sell quickly due to a life change or business opportunity. Instead of waiting for a broker to list, market, and manage the sale, you can approach a buyer and potentially close within weeks.
Takeaway: Off-market sales are perfect if timing is a priority. For motivated sellers, skipping the listing process can accelerate the timeline and allow for a quicker close.
4. Less Exposure to Market Fluctuations (or, “Avoid the Roller Coaster of Public Market Trends”)
Public listings expose your park to the whims of the market. If trends shift during your listing period, or if interest rates spike, buyer interest can dip, impacting your final sale price. Off-market sales allow you to negotiate in a controlled environment, less affected by sudden changes.
Example: Imagine listing your park in a high-demand market, only for interest rates to jump, reducing the pool of qualified buyers. In an off-market sale, you negotiate directly, making it easier to maintain your price point without immediate market pressures.
Takeaway: Off-market sales can provide insulation from sudden market changes, allowing you to negotiate in a stable environment. It’s an appealing option if you want to avoid potential price drops due to market fluctuations.
5. Potentially Fewer Buyers (aka, “Narrowing Your Pool but Focusing on Quality”)
Selling privately can reduce the number of potential buyers simply because the property isn’t widely advertised. While this means fewer interested parties, it also means the buyers who do show interest are often more serious, making the process smoother and more direct.
Example: Without the exposure of a public listing, you may not attract the same volume of offers. However, the buyers you engage with off-market are likely highly motivated and may already understand the mobile home park business, streamlining negotiations.
Takeaway: Off-market sales may have fewer buyers, but those buyers are often highly interested. If you’re okay with fewer offers, this approach allows you to skip time-wasters and focus on serious negotiations.
6. Limited Competitive Bidding (or, “Fewer Bidders, Less Competition”)
In a public sale, multiple offers can spark a bidding war that drives up your sale price. Off-market transactions rarely bring that level of competition, as fewer buyers are aware the property is for sale. Without multiple offers, you may miss out on a higher final price.
Example: Let’s say you’re negotiating directly with one buyer. Without competition, they may feel less pressure to meet your asking price, potentially driving a harder bargain.
Takeaway: Selling off-market may limit bidding competition, which could affect your final sale price. If maximizing profit is your main goal, a public sale may be better suited to attract competing offers.
7. Greater Control Over the Process (aka, “Calling the Shots from Start to Finish”)
Off-market sales give you more control over the timeline and negotiation process. You choose who to approach, when to negotiate, and how the sale proceeds, with less influence from brokers or outside parties.
Example: You may decide to handle certain repairs or allow flexible closing terms if it means finding a buyer you trust. The entire transaction remains in your hands, giving you more flexibility to customize the deal.
Takeaway: Off-market transactions provide you with the power to control every aspect of the sale, from negotiations to closing terms. For owners who prefer a hands-on approach, this level of control can be a major advantage.
8. Less Marketing and Exposure (or, “Flying Under the Radar Means Fewer Leads”)
One disadvantage of private sales is the lack of widespread marketing. Without a public listing, you’re not reaching the full pool of potential buyers, which can impact the visibility of the sale. Fewer eyes on the listing may mean a longer time to find the right buyer.
Example: Without a broker or online listing, you’re relying on personal connections or word-of-mouth to find buyers. If you don’t have a strong network in the mobile home park industry, this can make it harder to find interested parties.
Takeaway: Off-market sales work well if you already know potential buyers, but they can limit exposure otherwise. If you don’t have a network to rely on, you may find it challenging to locate interested buyers privately.
9. Possible Lower Sale Price (aka, “Private Deals Don’t Always Get Top Dollar”)
In off-market sales, buyers often expect a slight discount due to the private nature of the transaction and the lack of competition. Without a competitive bidding process or multiple offers, you may end up selling for less than the park’s maximum value.
Example: Buyers might negotiate for a lower price, reasoning that they’re doing you a favor by avoiding the hassle of a public sale. If you’re not firm in your negotiations, you could end up with a lower-than-expected price.
Takeaway: Private sales can sometimes result in a lower price, as buyers expect a deal for the lack of competition. If maximizing your sale price is a priority, a public listing might better serve your goals.
Final Thoughts: Is Off-Market the Right Choice for You?
Selling off-market has its advantages, especially if you value privacy, speed, and control over the transaction. However, it’s not the best fit for every mobile home park sale. Off-market sales tend to work best if you have a clear buyer in mind, a strong network, or a compelling reason to avoid a public listing.
If you decide to go off-market, prepare to manage more of the process yourself or work with trusted advisors who understand the nuances of private sales. And if you’re willing to sacrifice a bit of privacy for maximum exposure and potentially higher offers, a public sale might ultimately give you the best results.
Whatever you choose, understanding the pros and cons of off-market sales gives you the power to make a decision that aligns with your priorities and sets you up for a successful, satisfying transaction.
