Do you want to know the full story behind finding ‘off-market' property?
The Truth About Off-market Property
Anyone who has spent time house-hunting will be familiar with the term ‘off-market’ property.
Buyers agents love to advertise their abilities to access off-market properties, and for good reason. Every client wants to believe that there is a hidden world of amazing properties out there, just waiting to be snapped up!
Now although that is true in part, there’s more to these obscure opportunities than meets the eye.
Offmarket vs Pre-market
Not all off-market properties are the same and quite a number of homes and investment properties touted as off-market listings are better defined as “pre-market”.
This means there is an agency agreement in place with a real estate selling agent and it is ‘for sale’ however it won’t be advertised via the mainstream internet portals or local papers.
So what prompts this type of off market listing?
The “three D’s” – death, divorce, or debt and the accompanying need for discretion are reasons for many sellers to prefer this method. If the property is highly desirable and in a tightly held suburb or street it may not require mainstream exposure. An experienced selling agent with a close network of buyer’s agents and a VIP client database can generate sufficient interest and close out a sale without advertising.
In other instances the seller may just want to avoid marketing fees.
Sometimes the seller may not be 100% committed to selling, and just wants to test the market.
In any of these circumstances, the property is technically still considered to be ‘on the market’ because the seller has the intention to purchase and it is available to purchase. However because it is invisible to the general public it is given the term ‘off market’.
There is another type of off-market property- a property that is not for sale which a buyer’s agent can convince a homeowner to sell privately via a number of means.
For example; perhaps you are very focused on the area or streets within a suburb that you want to purchase. The best buyer’s agents use data tools to shortlist who may be a potential seller. Any buyer’s agent worth their salt maintains databases and relationships with thousands of selling agents and property managers (for rentals). They will leverage their relationships with those active in that desired area to make contact with candidates.
The best buyer’s agents will also go out door knocking, letterbox drop personal notes, and acquire phone numbers to call owners directly.
It is not uncommon for a homeowner to be swayed by the prospect of a quick sale at fair market value with no need for open homes, marketing costs, or contact with real estate agents! More direct communication between buyer and seller can result in the terms of the sale better suited to all parties too.
So you can see there is much more to the term ‘off market’ than first meets the eye.
Offmarket Property- Not Always The Best Option
It is important to mention that off-market properties are not necessarily a superior opportunity. Sometimes agents will run an off-market campaign just to find out what price a market will bear, or to create hype, or to maybe get lucky with an uneducated buyer. A lack of commitment to costs and an auction day deadline can also result in an unmotivated seller and this can frustrate the purchase process.
The skill to independently assess the value of a property is critical when dealing with an off-market property. If you’re negotiating the purchase yourself you are really risking overpaying or buying a lemon, unless you can fully appraise the property with quality data and research.
Gaining access to off-market properties should be a key consideration when choosing your buyer’s agent and it pays to ask how your buyer’s agent will present you with opportunities few others have access to. It’s also good to remember that a property that is on the market is often just as good a buying opportunity.
Want to learn more about how to find and secure your ideal property in Sydney’s competitive market? Here’s a 4 min read on the tricks and tips I use to win a property auction.
Have questions? I’d love to hear about your property aspirations and understand if i’m in a position to help you. If you’d like to book a free 20 min discovery call you can do so below. I look forward to hearing from you.