What A Little Birdie Told Me: Tips To Buying An Off-Market Property
Buying and selling off-market property is cloak and dagger stuff. Often a sold sign is the only indication an off-market property was available!
Residz Team 4 min read
A little birdie told me one of our neighbours is selling their property off-market. I was sworn to secrecy, because like many off-market property sellers, our neighbours want a discreet sale. Buying and selling off-market property is cloak and dagger stuff. There are no open houses or online listings to choose from, yet agents report up to 30%-50% of Sydney properties are sold this way (10%-20% nationally). Often a sold sign is the only indication an off-market property was available. Two ways to find an off-market property is through an agent who has access to listings or by word-of-mouth. But, there is another way I’ll share in a moment.
Reasons for selling a property off-market
There are many reasons you might sell a house or unit off-market.
- Cash in on a boom. When the property market is sizzling hot, homeowners read about neighbours who sold at record prices. Keep a hawk-eye on property values in their area, and use an off-market listing to test the market.
- Avoid the hassle. Buyers might have told your agent they are cashed up, ready, and keen.
- Consider the impact of COVID-19. When public auctions and open for inspections can’t go ahead as planned, off-market selling is a good alternative.
- Divorce. Selling off-market could be preferred if you’re going through divorce or separation. The law states property adjustments must be made within one year of divorcing or, if de facto, within two years of separation. Selling on the quiet might suit you both if you don’t wish to broadcast your movements.
- Saving fees. Off-market sales might save some of the estate agent commission, advertising and marketing fees, the cost of an auctioneer, and probably renovation and styling fees.
- Privacy. A big factor for many off-market sellers. No-one gets to zoom in on photos of your bedroom linen.
- No open inspections. None of that laundry-in-the-car-cmon-kids fretting on open days.
- Busy lives. Getting a house ready for photos, open days, and auctions takes precious time.
As well, multi-million dollar homes may be sold off-market to attract the creme-de-la-creme of buyers, who like exclusivity and refuse to traipse through open homes like the rest of us.
Reasons for buying a property off-market
Reasons people buy off-market are similar to why many homeowners sell off-market.
- Affordability. You know how those rare affordable buys rarely make it to market.
- Not wanting to attend auctions. Anyone who’s been to an open inspection or auction recently knows the nerve-jangling experiences that only highlight the competition. You don’t want to pay a premium for this property? Heck there are hundreds who do!
- FOMO. Fear of Missing Out fuels you serially-disappointed buyers who now want to snaffle an off-market property before the wider public learns about it.
- Scarcity/exclusivity. Robert Cialdini’s famous book Influence: The Psychology of Persuasion explains how opportunities seem more valuable to us when their availability is limited. It’s got a name: The Scarcity Principle.
- Privacy. No nosy neighbours letting everyone know you were talking to the agent.
- Busy lives. Off-market buying is pitched to your timetable, not a Saturday open that suits the seller or agent.
- Covid-19 restrictions on travel. If you can’t attend the open inspections anyway…..
The real estate market is going through disruption. Buying off-market is becoming more common, as is buying sight-unseen, buying over zoom, and buying through buyer’s agents.
How do you find a property that’s off-market?
Building relationships is the best way to find property off-market. Here are some of those relationships that can help you find an off-market house for sale.
- Engage a buyer’s agent. Buying is their job 24/7 and they act for the buyer not the seller. Buyer’s agents see everything that is on- and off-the-market in their area through their strong relationships with local agents. They are terrific sources of pricing information and are in constant conversation with other real estate agents.
- Real estate agents. Get on their books, and their good side. Real estate agents win business by building a list of ready-to-commit, qualified buyers. Get yourself to the top of their list by being organised, friendly, and checking in regularly.
- Do your own hunting. There are a number of new online tools to find off-market properties. Australia’s 12 million dwellings are each listed on free property tool Residz.com. While very few will be on sale at any one time, it’s free to type the name of a suburb into the Residz search bar, and go from house to house assessing their potential as your new home. After doing your research you can send a letter to the address, or ask an estate agent to approach the owners on your behalf. You can also list your interest on buyer/seller matching platforms like PropertyWhispers or Listing Loop.
Summary
Buying or selling off-market is not for everybody. It cuts down the competition but doesn’t necessarily offer buyers a bargain price nor seller’s a premium. Yet buying and selling off-market may be less stressful and more controllable than a six-week advertised campaign. Real estate property expert Andrew Winter says real estate is Australia’s favourite national sport. Finding a property off-market is like orienteering, or clay-pigeon shooting. It can get you what you want, but is not without its wrong turns or misses.