A Guide to Off-Market Real Estate

A guide to off market listingsOff-market real estate is often seen as a secret club accessible to only a select few. While it’s not strictly secret, if you want to take advantage of off-market real estate, you need to know people.

Buying off the market is a brilliant way of buying an investment property or home in Melbourne. If you know what type of property you’re looking for and are willing to make a fast deal, an off-market purchase could be your best option.

What is off-market real estate?

Buying property off the market means purchasing a property that was not offered for sale to the general population. An easy way to think of it is where you might approach someone about their property and offer to buy for a specific price. If they accept your offer and complete the sale, you’ve made an off-market purchase.

Purchasing off-market has several advantages, and it can save you time as you don’t need to search through copious amounts of marketing materials such as online property boards. You can also avoid many of the traps associated with buying a property at an auction (e.g., getting lost in the moment and bidding over your budget.). An off-market sale usually relies on a sale agent having contacts and finding the perfect buyer for a specific property. You’ll find that many off-market sales are completed using a buyer’s agent as they have excellent contacts with prospective buyers.

Buying off-market requires a lot of real estate know-how, and it is often left up to those with established contacts. Real estate agents are always looking for the fastest sale possible, and when they work closely with people looking for an off-market purchase, it can save them time and money.

Property Investor Podcast
Check out my podcast on off market property. 

Off-market purchases can be challenging, but there can be some excellent opportunities for those willing to dive in. With off-market buying, you’ll enjoy a streamlined process, have access to a comprehensive selection of properties and have limited competition. Buyers and sellers can complete the process while maintaining their privacy.

When is buying property off-market not a good idea?

One of the issues in buying off the market is the premiums involved. These premiums can lock out many potential buyers, but keeping the sale and purchase private is why this method is the favourite choice for high-net-worth people; celebrities almost all use off-market purchases as it keeps many of the details out of the public’s eye.

When you’re buying an off-market property, your choices are limited because they are not as many on offer. If you’re a first home buyer, you may find that off-market properties can be risky, especially if you do not know the real estate market very well. If you’re thinking about buying off-market, you need to ask yourself some questions:

  • Can you choose a property based solely on its value?
  • Can you avoid getting emotionally attached to the property?
  • Do you have the capital available to make a solid offer to the seller?

Buying property off-market means you need to be ruthless in your desire to own a particular property. Most off-market properties will attract people looking for a particular property, and they’re willing to pay a premium to secure it. If you can’t offer the best price, you may miss out. You also need excellent negotiating skills. Knowing the value of a property, or using a buyer’s agent, is key to getting the best property at the right price.

Making an off-market purchase will take time, resources and effort. You should consider if buying off-market is the right choice for you before heading down the rabbit hole.

Why would anyone sell off-market?

Off-market property sales are taking off rapidly in Australia as sellers note the benefits these provide. While different sellers will all have different motives for selling, most people selling are looking for the best possible sale price in the shortest amount of time.

Selling a property off-market offers sellers several benefits, including:

  • Saving on marketing and advertising costs (approximately $10,000-$20,000). These savings are often passed onto the buyer and help produce a quick sale.
  • It helps the seller maintain their privacy. Sellers can avoid nosy neighbours and other people who are “just-looking”.
  • It avoids the hassles of maintaining an open house, and sellers only deal with serious buyers.
  • Sellers will avoid stressful auctions.
  • It offers a good solution for owner-occupiers and avoids dealing with uncooperative tenants.
  • Many vendors prefer to buy off-market.
  • Often results in a fast sale.

How do you find off-market properties?

If you’ve learnt all about off-market property buying and decided it is the right thing for you to do, it’s time to get started!

Before you even start looking for properties, you need to have a good list of what you’re looking for in a property. You’ll find that off-market properties can go quickly, so you need to know precisely what you want and be ready to move when that ideal property falls in your lap.

Some things you may wish to consider include:

  • Price range
  • Location – close to work, schools, etc.
  • Property type – apartment, detached house, etc.
  • Property style and floorplan
  • Any features that you cannot do without – large backyard, etc.

You can also make a list that includes ideal components or a wish list that includes things you’d like but are not necessarily deal-breakers. For example, you may like having a pool, but it’s not an absolute necessity.

After you’ve constructed your list of must-haves and ideal inclusions, it’s time to make some contacts in the real estate game. You can join a database or off-market subscription list and contact some real estate agents operating in the area. If your local agents know you’re looking for that perfect home, they’ll usually contact you first, aiming for a fast sale before they even bother to list it with the general public.

If you don’t want to do the work yourself, or you don’t have the time available, then securing the services of a buyer’s agent is an excellent choice. Buyers agents are adept at making and nurturing contacts with real estate agents, and they will have a good feel for the market and what homes are currently valued in your chosen location.

In some cases, you may need to adjust your expectations with properties. For example, if you need a backyard pool but can’t find any, you may need to look at properties with enough backyard space to install one later.

The Australian property market in 2024

The property market in 2023 has been particularly volatile. The Reserve Bank of Australia recently voted to keep cash rates low, making variable rate loans more attractive to buyers. However, experts predict a rate rise in 2023, and choosing a fixed-rate loan may make better financial sense. The loan you choose for your next purchase needs to fit in with your current lifestyle and prepare you for future rises in living costs.

Property price drops, and a slow auction-rate leans toward a nervous buyers’ market. As interest rates take effect on the housing boom , people look for quick and no-fuss purchases. This indicates that 2024 could be the perfect year for some excellent off-market deals.

Follow this link for more info on how a buyers agent can assist with off market listings.