Off-market property: to buy or not to buy?

You’ll hear a lot of people in the real estate industry referencing ‘off-market listings’. But what exactly are they? Are they all they’re cracked up to be?

What’s an off-market property?

Some ‘off market’ properties truly are, off-market. The vendor doesn’t have any intention of publicly advertising their property for the foreseeable future. They are looking to dip their toe in the water, test the market – see if they can get their dream price!

What’s so great about off-market properties?

These opportunities can be amazing; you can find yourself in the box seat to negotiate almost directly with the vendor on a property which may otherwise have had strong competition. On the other hand, there is also the very real possibility that their ‘dream price’ is exactly that, a dream! In these cases, we can gauge pretty quickly if an inspection is even worthwhile.

You may also find a lot of vendors selling off-market aren’t genuinely committed to the selling process. They may decide after two weeks of buyer feedback to put the property up for lease or sell privately to a family member for example.

Tell me more about pre-market properties…

The other type of off-market property is more ‘pre-market’. This is a strategy a lot of agents are employing at the moment. They sell their vendor on their exclusive buyer database and the possibility that by sending the property info out two weeks prior to the official campaign start date, they’re giving their vendors an opportunity to sell prior to incurring any advertising costs – which can range anywhere between $3,000 - $30,000!

More often than not, vendors need some proof of market value to help them decide if they feel they’ve achieved a good price. That usually comes in the form of buyer feedback throughout multiple inspections, verbal/written offers during the campaign or of course bidding at an auction - which is the ultimate show of true market value. Without these validations, most sellers find it hard to make a firm decision. So even if you are offered a pre-market/off-market opportunity and after inspection, you decide to put forward a written offer, you may find that the vendor is simply not ready to sell.

As with all property purchases, on or off-market - the key is to do your own due diligence. Find the right balance between what that property is worth to you, and what it is worth in the current market. And as always, if you’re unsure… call in the experts! (that would be us).

Happy Buying!

Sam Davenport – Property Advocate