“Off-market” properties - what are they?
Why would anyone sell this way?
Are they really around in the current buyers' market and why should you consider buying one?
The buyer's agents at Metropole Property Strategists come across two types of what I would call “off-market” transactions.
Most are really “pre-market” opportunities.
We get the opportunity to inspect and make an offer on a property before it hits the Internet and the general market.
And then there are the true “off-market” opportunities where for various reasons the vendor doesn't want to make the sale of their property public knowledge.
And yes they do occur!
Last month the team at Metropole bought six separate properties off-market (no one else knew about them) and currently, in let's call it an "interesting" property market, a significant portion of the properties we buy for clients are bought this way.
So let's look into this in a little bit more detail…
It works a bit this way…
When a selling agent lists a new property and it takes about two weeks before it hits the Internet.
During this time photographs are taken, floor plans are drawn, the seller must approve the marketing and all this must be loaded on the Internet.
If you think about it...most selling agents would prefer to keep their whole selling commission for themselves rather than sharing it with other agents in the office.
So what do they do?
Well…they don’t tell the other agents in their office about it for a few days and instead, they ring their “A grade” clients and offer them this great new property they have just listed for sale.
And then they call their “B” clients and then they ring anyone else they think may be interested.
A few days later they have to tell the other selling agents in their office about the property and these agents do the same - they call their top clients.
And if it doesn’t sell, eventually the property gets listed on the Internet and you find out about it.
Now this is tough when you are just a "normal" property investor or home buyer.
You're probably only going to deal with selling agents a few times in your life and with the one particular agent who's listed the property you are after once in your life.
On the other hand, the team at Metropole were involved in over a quarter of a billion dollars worth of property transactions in the last year alone.
Do you think this puts us on the speed dial of most selling agents in the areas where we are active in the Sydney, Brisbane, and Melbourne property markets?
So while it may be difficult for you to get the call, you can still benefit from this special treatment by having the team at Metropole on your side - let us stack the odds in your favour.
By the way that’s the easy bit!
If you’re interested in starting or growing your existing property portfolio just click here and organise an obligation-free Complimentary Clarity Consultation with one of the property strategists at Metropole to discuss your options.
Of course, at times there are genuine reasons why some sellers request an "off-market" sale.
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Some of the ones I have come across include:
- To save on marketing and advertising cost - while it might do this, the lack of open competition often lowers the selling price
- The need for privacy includes not wanting the neighbours or family to know until the move happens
- Financial pressure and the need for a quick sale
- Divorce, death or change in personal circumstances and the need for a quick but private sale
- Nervous about auctions or lots of potential buyers tramping through their property.
I remember a couple of years ago we were notified by a selling agent (one that usually loves conducting auctions) that he had just listed a great property for sale in a prime spot with water views in the Melbourne suburb of St Kilda.
This well-looked-after, fabulously positioned apartment would suit a large range of owner-occupiers or investors yet we were offered the first opportunity to look at it, and the seller didn't want an active marketing campaign.
Why would this be so?
Despite the property having wide appeal it was tenanted, and the tenants made access very difficult - they were very private people and made inspections very difficult.
Unfortunately, the vendor was in financial problems and wanted a quick sale and couldn't wait for the lease to expire and then sell then auction the property and achieve the maximum price.
The selling agent rang us to see if we had a client who would be interested in this property and we certainly did.
And the result was Peter (one of our property investor clients) purchased a fantastic investment off-market, without competition at auction and at a very fair price.
We're always looking for development sites for our clients to build small residential townhouse projects to keep as a long-term investment.
Local selling agents (in the suburbs where the team at Metropole are actively looking for properties) know that we are always in the market for our clients and one rang telling Bryce Yardney of a property he had just listed that was a deceased estate.
The sellers were two elderly gentlemen who lived in different parts of regional Australia (brothers of the deceased owner) and had inherited this substantial property that would have given them a considerable windfall.
Interestingly, despite their seven-figure inheritance, they weren't keen to spend the required $15- $20,000 on marketing costs and were a bit nervous about taking the property to auction.
Instead, they were happy with the certainty of an unconditional sale.
We were the only buyer notified about this opportunity, our clients made an unconditional offer within 48 hours and now own another great development site.
(They had just completed another development using Metropole's project management team.)
The sellers are happy, the agent got a quick sale (and didn't have to share his commission with anyone else in the office) and we got a great deal for our client.
In fact, I would call it a bargain.
We get these opportunities all the time at our offices in Melbourne, Sydney, and Brisbane.
As I said, we did six of these off-market or pre-market deals last month.
The most common reason we are offered these opportunities is that there are tenants in place who make it difficult for potential buyers to inspect the property or maybe don't keep the property in a presentable condition.
However, as buyers’ agents, we can see the potential opportunity through the clutter.
But it's not always so easy...
You see…many agents list the properties they have for sale by "buying the listing".
In other words, they entice the seller with an inflated price to get the listing and then slowly condition them to the real market price.
This means that many of these opportunities we’re offered are not suitable for us, but that's okay.
That's the way the property market works.