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We hear about off-market properties all the time. Let’s understand what they are.
A property is called off-market when it’s not listed on a sales portal like realestate.com.au and domain.com.au. Pretty simple, isn’t it?

It makes perfect sense for a property to be listed on the market to have maximum reach to potential buyers but still, some properties get sold off market.

Let's deep dive on the reasons why:

  1. Buyer or their agent secures a property by letter drops, saving seller on the selling cost. This is the best category of off-market deals as the deal hunt was targeted to align with the buyer’s interest, though it contributes to a very low percentage of total off-market deals which are sold.
  2. Some sellers ask agents to sell their properties without listing it on the market for privacy reasons. Agents share these listings with their network and also, leads saved in their internal database. These deals could still be attractive/favourable and are the second-best off markets available.
  1. Other category is where the agent has secured the listing and before advertising it on the market, agents share the details with their potential leads and buyer’s agents to save on time and marketing costs. These listings are usually ‘premarket’ and not true off-market. The agent in most cases sells premarket when they are paid equal to or better than the asking price. These are not always the best option though you avoid competition but could be good for very particular asset types in a high demand market/location (think owner occupied preferences here, where many a times the location and asset type matters more than money).
  1. Another category is the deals that were listed on the market earlier and were not sold. Listing was taken off and now being sold off market. There are fundamental reasons why it wasn’t sold in the first place which could be an issue in property, location or price. In this case, unless the expectation has come really down now and the buyer is educated enough to understand what they are buying at a reduced price, these may not present a good value. Though with reduced prices, these can sometimes be a good deal but due diligence needs to be thorough here.                                                                                         
  2.  Seller sometimes tries to sell the house themselves using social networking marketplace or the property is inferior, and seller doesn’t have confidence in its ability to sell so they try to save on selling cost. These properties could be anything so thorough due diligence is a MUST and buyer should know clearly what they are buying. 

    More negotiation power due to less competition is a benefit in off-market deals but buying “cheap” shouldn’t be the core focus while investing. You should buy the “best” asset for your budget at the “best” possible price.

    A good buyer’s agent focuses on buying the best possible asset as per their buyer’s expectation for their budget. With their expert negotiation skills and relationships, they can secure properties ahead of other competitors at a good price. For them, it really doesn’t matter if the property is listed on the market or they got it off-market, as they are solution focused and do not care about the source!