Off-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.
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.
Purchasing an off-market property involves acquiring real estate that hasn’t been publicly listed for sale.
Essentially, it’s like directly approaching a property owner with a purchase offer for their property.
If they agree to your terms and the sale goes through, you have successfully bought a property off-market.
What are the advantages of buying off market?
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.
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.
