To those who’ve never been part of an off-market property deal, they can be something of a mystery.
But off-market property sales – a term used to define a property that is selling or has been sold without any public advertising – are increasingly popular across Australia. And as with any approach in real estate, there are pros and cons for those on both sides of the transaction.
Pros of off-market property sales
Most people think an off-market arrangement is a win for the buyer because of reduced competition, but experts say the non-traditional approach offers potential upsides for both purchasers and sellers.
1. Opportunity to get a bargain. Property commentator Terry Ryder says purchasing off-market can help buyers avoid competition-driven price inflation often seen in the open market, meaning they can get a better deal. Without the pressure of possibly losing the place to someone else, the buyer can make a “sensible, considered decision that is best in line with their needs and budget.”
2. Much lower anxiety levels. Kirk Simpson, head of Lucra Property Group, says another advantage for buyers is more intangible. It just makes the entire process of buying less anxiety-ridden. “You are not competing and it’s so much less stress. Any buyer who has ever attended an auction or a busy open home knows exactly what I mean,” Simpson says.
1. It’s a “stress less” option. From a vendor’s perspective, the off-market avenue removes the stress factor, Ryder says. “You’ll save time, hassle and money, with no open houses and minimal inspections and avoid exposing yourself to the risks inherent with open houses. You’ll also save on advertising, signage and other marketing costs,” he says.
2. The chance to get a great price. Through going off-market, sellers have the potential to achieve a fast sale, at a great price, Ryder says. “You can avoid the length of a normal sales campaign and can confidently move forward with planning your move or next purchase. “
Cons of off-market property sales
As is perennially the case with any property-related decision, there are some negatives to consider too.
1. Limited pool to choose from. Buyers might not have a huge selection of properties to choose from if they strictly want to purchase off-market, Simpson says. That’s because it’s not the preferred method for most sellers, which may limit a buyers’ options.
2. Requires patience. “Patience is definitely something you need with this type of approach, as when there is a high clearance rate – like there is currently in most areas throughout Australia – vendors are less keen to adopt an off-market strategy,” Ryder says.
Tracking down the right agent, to find the right off-market property, also requires persistence, so “off-market sales may not be for those looking for a fast purchase,” he says.
1. Risk of not getting top-dollar. The most obvious and costly disadvantage of selling off-market, Simpson says, is sellers might not get the maximum price possible. This is because they aren’t testing the property on the open market and creating competition among buyers.
“The general rule of thumb in sales is that the more eyeballs that see your property, (that will) usually equate to a higher sale price.”
2. Difficulty in judging buyer seriousness. Ryder says it can be hard to gauge the sincerity of potential buyers with off-market deals, “but a good sales agent can usually navigate this.”