Is Off Market A Turn On? - September 2023
September 15, 2023 / Written by Leanne Pilkington
Offering a property for sale ‘off market’ is not a new tactic but it is a strategy that’s gaining some traction in the current market. Done right, selling agents can attract qualified buyers to a property before it is widely advertised and secure a sale in quick time with minimal expense. It became popular during COVID, when buyers agents had plenty of highly-motivated, qualified buyers on their books. But the circumstances have to be right and so do the relationships. This month Laing+Simmons CEO Leanne Pilkington unpacks the pros and cons of buying and selling off market.
We’re seeing an increase in the number of properties being offered and sold off-market at the moment compared to previous years. It’s not just the prestige end of town either. It’s a strategy agents are using across different price points in different suburbs.
Vendors might prefer an off-market campaign for a number of reasons. Some figure it’s a way to save money. Others do it for privacy reasons.
For buyers, there’s a sense of exclusivity in being offered to see an off-market property. It’s almost like a first right of refusal. You’re seeing something before everyone else. It’s exciting.
But there’s a vendor on the other side of the equation and they’ve done their sums. They may be willing to compromise on the final price on account of the costs they’ve saved by not launching a full campaign. But in many cases, the pros and cons of this strategy are negligible in purely financial terms. A few thousand saved on one end, a few thousand less received on the other.
Vendors need to take more than simply money into account in weighing up the off-market path. It has to be a decision made in collaboration with their agent.
Instead of money, an off-market strategy is better evaluated in terms of relationships. At the heart of it is the relationship between selling agents and buyers agents. This is the make-or-break intersection of an off-market strategy.
A selling agent with good relationships with buyers agents can approach them prior to going to market to get a sense of the appetite among their database. They know buyers agents will have access to qualified buyers ready to pull the trigger and so long as the property itself is the right fit, going off-market can work well.
That’s if the right buyer is in the database, of course. Being able to access qualified buyers up front is the crucial ingredient. With this in mind, selling agents have other strategies up their sleeve too.
In the right circumstances, an agent might invite highly qualified buyers through the property they’re selling prior to a full campaign launch, to elicit some early offers. Again, a relationship with a buyers agent will help here.
If an offer is made that the vendor is happy with, great. If not, all is not lost. The agent will now have a better idea of the likely value and level of interest in the property to draw on when designing the sales campaign.
Deciding to sell a property off-market is not without risk. By choosing to limit the number of would-be buyers who see the property, vendors are limiting the number of offers potentially received.
But ultimately, it’s the quality of offers vendors should be interested in, instead of the quantity. And quality offers come from qualified buyers. It really is down to the selling agent and their relationship with buyers agents. For vendors wondering if an off-market strategy is best, the first question they should ask their agent is about their relationships.
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