Have you heard people talk about an off-market listing and wondered what they meant?
An off-market sale is a term used to define a property that is selling, or has already been sold, without any public advertising.
It’s a term that sometime pops up in property conversations and is usually linked to a property that needs an immediate sale, where the sale is often more important than the sold price.
So what is it and is it actually worth it?
Selling your property off market is not an ideal way to achieve the maximum price – it’s often a last-minute choice.
Off market means the home can be bought if its owner is presented with an acceptable offer but has decided not to promote the fact. An off-market sale is a faster sale, but not always the best outcome.
Cameron Patterson, Founder of InReach Investments says these transactions are common if a vendor needs an immediate sale.
Darren Dean, Owner and Managing Director of Sweeney Real Estate’s Yarraville and Footscray offices in Melbourne, says the anonymity of selling your home off market is often attractive to anyone with a high profile.
Vendors with tricky families or neighbours sometimes see value in keeping the home’s sale out of the public eye.
“Those in need of a quick sale are commonly relationship/marriage breakdowns, financial reasons, deceased estates or the vendor maybe going through employment changes,” Patterson explains.
“Regardless of their reason they all have one thing in common: they need the sale to take place urgently to allow them to get on with other higher priority issues in their lives.”
But how do you find an off-market home for sale?
The estate agent is still key to discovering these properties, so making sure you local agent knows your property searching profile can make all the difference.
The key to spotting an “off-market” sale is “relationships, relationships, relationships”, Patterson says.
Get to know the selling agents in your ideal buying area. Also talk to others in associated sectors including mortgage companies, banks, buyers’ agents and valuation experts.
“Once a buyer has identified an area of interest they should then network/create new contacts with local agents, making their intentions clear,” Patterson says.
“These relationships then need to be maintained. Failure to maintain these relationships often leads to breakdown in communication and hence decreased opportunities and it is very important for buyers that, while they may have the opportunity to pick up an ‘off-market’ sale, they still perform all of their due diligence.
“This includes things such as building and pest inspections, strata reports, finance approvals etc.”
He says learning about off market properties can be “a very power tool” for property investors, who are often looking to snap up a bargain.
“These types of sales are generally only available for a short period of time and they are often a result of being in the right place at the right time.”
What are the advantages of an off-market sale?
To the buyer:
- A bargain price. There is often little, if any, competition, – you may find you are the only buyer who knows about the silent listing and this exclusivity can mean buying for a lower price than on the open market.
- More likely the vendor will accept your offer – “If the initially submitted offer is below market value and the vendor is in a distressed position, which is often the case, there is greater potential for the deal to be accepted,” Patterson says.
How to: Buy property through private sale
To the vendor:
- A quick sale – if priced keenly.
- Usually sold with more terms and conditions. When a vendor wants a low-key sale, the quickie sale is often subject to more conditions including shorter settlement periods, bigger deposits, or inclusive of any building faults, Patterson says.
What are the disadvantages of an off-market sale?
To the buyer:
- You still have to find a property that meets all of your criteria – location, features, condition and price – so there may be more footwork
- It’s all about who you know and it takes time to build those insider relationships
- No marketing materials means you cannot build a visual file of ‘possible’ off market investments
To the vendor:
- High possibility you will get a lower price than if you advertised your property
- No chance to go to auction or leverage the enormous passive market of online viewers who regularly surf for investment or owner-occupied properties, Dean says.
- You may come out behind. “It is horses for courses but the reality is many vendors think they will save a few coins avoiding advertising costs when listing off market but actually cost themselves 10s of 1000s because off market won’t create the competition of a marketed sale,” Dean says.
Frequently asked questions
1. Why do sellers sell off market?
Sellers who sell their home off market are usually after either a quick or private sale.
For a property that needs an immediate sale, and off-market sale is often chosen because the house selling is more important than the sold price.
Given the anonymity of selling your home off market, it’s usually attractive to anyone with a high profile or who wants some privacy through the process.
2. Can you buy a home that is not on the market?
Yes, you can buy a home that is not on the market. In order to find off-market properties for sale, you will need to work with agents to help you find these properties.
It’s a good idea to get to know the agents in your chosen area so that can work with you on what might be available.
3. Can you take your home off the market and re-list later?
Yes, in short you can take your home off the market and re-list later.
It may be that your home is taking too long to sell and you decide with your agent that this is the best course of action.
However, if you decide you want to take it off the market and this is not what your agent is advising, you will need to look at your agreements with your agent as you may be open to fees and so on.
4. Do you need to pay your real estate agent if you take your house off the market?
Yes, you may have to pay your real estate agent a fee if you take your house off the market. This will all depend on the circumstances and your agreement with the agent.
This detail is usually covered off in your agreement and most will have a section on the terms and conditions about taking a property off the market and/or re-listing at a later date.
This article was originally published on
24 Sep 2020 at 10:00am
but has been regularly updated to keep the information current.