Off-market properties: Why they may not be a great deal
As the owner of a buyer’s agency, I make no secret that we secure many properties off-market for investors, but in Sydney and Melbourne currently, we often have to say no to these deals and let them go to market to actually get the property at the correct price. Here’s why.
While the benefits of buying off-market or “pre-market” have been well publicised – particularly the lack of competition from other buyers – the double-digit price falls that we’ve experienced across Sydney and Melbourne have potentially turned this model on its head.
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In a rising market, getting the tip-off from a real estate agent about an upcoming sale before it reaches the online portals (pre-market) or having access to a true off-market sale that will never hit the internet gives the buyer a huge advantage over other potential purchasers.
However, in the current Sydney and Melbourne markets, the savvier agents will exploit the exclusive nature of an off-market transaction to lure buyers into paying inflated prices for properties, using the threat of putting the property on the open market to seal the deal.
To be clear, this is not an attack on sales agents – they are paid by their vendors to achieve the best possible price for their properties – it is simply a warning to time-poor buyers that the seemingly quick and easy option of the silent deal can turn out to be an expensive mistake.
In markets that are down 15-20 per cent from their peak, as is the case in many Sydney and Melbourne suburbs, properties must be tested in the open market to discover their true price.
Occasionally, we have to say to an agent: “Sure, put the property on the market and then come and talk to us in six months’ time when it hasn’t sold!”
Sometimes the best deals are hiding in plain sight on the latter pages of realestate.com.au or Domain. They may be cosmetically challenged but structurally sound, have untapped development potential, or simply be poorly photographed.
Our research can also uncover stale listings, where the property has been officially withdrawn from sale but where the owner still has the intention to sell if approached.
Our job as buyer’s agents is to sort through all the available options, both on-market and off-market, and tailor the purchasing strategy to the client’s unique circumstances.
