The term ‘off market’ is sometimes see as the ‘holy grail” of a property purchase. If you have been involved in searching for a property, you would have come across both selling agents and buyers agents, talking up the prospect of purchasing an “off-market” property. But does buying an off-market property guarantee you of getting a bargain? Not necessarily…sometimes, but not always.
Off-market property, is simply a property that is for sale that is not publicly advertised or marketed by the agent, usually through the major platforms of Domain and Real Estate. I have seen many buyers agents promote their business success around the fact that they buy the majority of their purchases off-market and claim that this is the best way to buy property. I must admit, one of the benefits of using a buyers agent, does give you greater access to off-market property. And yes, I have bought many properties for my clients that fit into this category. But I strongly disagree that an off-market property is always the best property and most definitely does not always mean you get a bargain or buy it for the best price.
Off-market property exists because the agent or vendor decides this is the best way to sell the property. It could be due to the fact the vendor does not want a public sale or they need a quick sale due to circumstances, for example, a deceased estate or divorce. The agent might also encourage an off-market sale to save money on marketing or because the property isn’t a “marketable” home. The agent will sometimes conduct an off-market campaign before taking it to market unless they get the desired price and/or conditions. (Pre-market)
Just because a property is off-market, does not always mean it is the right property or the best value. Sometimes, you may need to pay more than the market value to secure the property in order for the agent/vendor not to take the property to the general market. This could be an option, especially if the actual property is unique or rare and is in a desirable suburb or location and ticks the majority of your needs and wants. But sometimes the asking price of an off-market maybe extraordinarily high, purely because the agent and vendor are hoping someone will come along and pay above market price simply because they don’t want to miss out. (FOMO).
For example, I recently went to see an off-market property in Lake Macquarie, that may have suited one of my clients. It was a nice property but it didn’t suit the needs for my client, mainly because of the layout and style. The agent was mentioning the vendor wanted offers in the $1.3m-1.4m vicinity, or they would take it market. The property was never worth this price but after a 3 week off-market campaign and a 3 month on-market campaign. The property eventually sold for $1.055m, well below the expectations of the vendor and agent.
So, how do you know if an off-market property is actually worth buying off-market? Well at Open Doors, we have our clients best interests at heart and assess every property, off market or on-market, to determine the best approach to take to secure it. We conduct a full property analysis on every property our client wants us to pursue. We determine the market price for property, based on comparable recent sales, as well as taking into account the unique characteristics of the property and current market conditions. We also carry out any due diligence to uncover any issues that maybe red flags or deal breakers. We make sure our clients have all the relevant information so we can make an informed decision moving forward, which brings clarity and confidence to the property purchase. This analysis helps determine the best approach to secure the property for the best price. This might entail submitting a strategic offer while the property is off market, or potentially waiting to see what happens when the property does go to market.
Therefore, just because a property is being talked up as an “off market deal of a lifetime”, doesn’t always mean it is the right property and certainly doesn’t mean you will get it for the best price. Don’t get sucked into the “off-market” hysteria, buy with confidence and clarity, without regrets.
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