How to buy off-market properties
May 31, 2018 - Blog
Off-market properties are often considered to be the pinnacle of property buying opportunities.
They are the properties that are not listed publicly or perhaps the owner has the intention of marketing it at some stage in the future but is open to offers from buyers right now.
Why do off-market properties exist?
It can be for myriad reasons such as they want to keep the sale off the radar or they need a quick sale because of a sudden change in circumstances.
The three Ds can often be an unfortunate cause for a quick sale, which include divorce, death or debt problems.
Perhaps they just don’t want the added expense of marketing costs or dozens of people traipsing through their home for weeks on end.
Whatever the reason, off-market properties do exist, and they sometimes can be secured for a good price – even under market value if the vendor’s motivation is a quick sale above anything else.
However, the thing with off-market properties is that most buyers will never know about them and therefore don’t often have the opportunity to buy one.
That’s because it is usually the selling and buying agents who are aware of what’s available off-market in their area.
Over the years, they’ve developed strong networks and relationships, so buyer’s agents are often the first to learn what’s on the market on the quiet so to speak.
A recent off-market purchase for our client
A prime example was a recent purchase we made for a client in Potts Point.
We had already worked with the client to establish her budget as well as the potential buying locations.
That is one of the must-haves when it comes to securing off-market properties – you have to be ready to make a solid offer quickly as well as have your finance pre-approved.
They are not called off-market opportunities for no reason after all.
We learned about the property, which ticked all the requirements for the client, from our existing relationships with selling agents in the area.
The reason why the property was off-market was that it was currently tenanted and originally the vendor was going to wait until the end of the tenancy before undertaking some cosmetic renovations and then sell it via the usual channels.
However, we managed to inspect the property before the end of the tenancy and were easily able to look beyond its minor wear and tear issues.
We then offered a solid price to the vendor, which meant they could avoid the costs of the proposed updates and marketing as well as the headache of listing and selling it publicly.
The vendor was happy with the price, so our client was soon the happy owner of a one-bedroom unit in Potts Point that may have been out of her price range if it had been on the market and therefore attracted competing offers from other buyers.
Sometimes a property might be “pre-market”, which means it is off-market until the vendor commits to all of the marketing costs and releases it publicly online.
Whether a property is pre-market or off-market, though, there is no question that they provide buyers with an opportunity.
They can potentially secure a good property for a reasonable price – especially if the seller’s motivation is privacy or a fast sale rather than price.
To be in the loop, though, buyers must develop good relationships with agents, have their finance organised, and be honest about their purchase budget.
That’s because, while a selling agent always wants to secure the best price for their vendor, they also usually want that to happen as quickly as possible.
If they end up wasting their time suggesting off-market properties to you that are clearly outside of your price range that goodwill will quickly dissipate.
The other option, of course, is to work with a specialist buyer’s agent who understands the local market, knows the selling agents in the area, and is one of the contacts that an agent will call when one of their listings is available off-market.
If you are considering purchasing a property in Sydney and would like the opportunity to access every property on the market as well as off-market properties, please get in touch with us below: