Off-market properties offer less competition and allow you more room to negotiate. Because of that, they could be key to you getting into the property market.
“Technically, an off-market property isn’t yet listed with any agent and isn’t on any of the known real estate portals,” says Shane Hiscock, director and buyer’s agent at Locate Buyers Agency. “That would be pure off-market, but some people also call a property off-market when it’s listed with an agent but has not been pushed out to the database or online portals yet.”
What’s not off-market is a property that an agent has listed and then posted up to their personal social media platforms, Hiscock says.
The Advantages and Disadvantages of Off-Market Properties
Their advantage – being able to negotiate without any other competitors – does depend on the specific scenario as sometimes agents send the property to a few people who might be interested, he says. Though, even if that is the case, overall, the level of competition is usually less. Another advantage is you are getting access to a property that you might not otherwise have ever been able to access.
Off-market properties do come down with downsides, too – one of them being that sometimes the sellers of these properties are just fishing for high offers and are not genuine sellers.
“There isn’t really any risk to a seller saying to an agent, ‘I’m happy for you to see if you have anyone off-market for my property’ and sometimes they are just being opportunistic and looking for a price that isn’t there,” Hiscock says.
Another downside? Sellers have not had the benefit of getting people through the property and often end up not making decisions as they really aren’t sure whether the price offered is a good price or not, he says. This often results in a lack of commitment from the seller.
How to Find Off-Market Properties
So, how do you go about finding off-market properties? For individuals, the best way to find them is to have strong relationships with local real estate agents, says Hiscock. In many cases, local agents have been talking to homeowners in the area consistently for years, so they have relationships with sellers.
The other option is, of course, to use a buyer’s agent, like Hiscock. Buyer’s agents can access more options than a real estate agent as it might be risky for real estate agents to give out property details if they haven’t secured the seller as a client yet.
“Targeting specific property addresses or even areas of streets is a great way to also narrow down options and seek out people who might not have thought about selling,” says Hiscock. “Once you have some target properties or locations in mind, the key then is working out what will be the most effective way to approach those owners to see if they will sell.”
The Budget You Need for Off-Market Properties
Off-market options exist at all levels of the market, says Hiscock. Often, there are more at the high-end of the market as sellers look for more privacy when selling their homes. But no matter the price point, there will be owners who may not be thinking of selling until presented with an opportunity.
“There can be many, many reasons why an owner who wasn’t thinking of selling may now consider selling,” says Hiscock. “For example, let’s say they own an investment property, and they are approached to see if they would sell the property. They may not have been thinking of selling it however, once the opportunity arises, they start to think about what they could do with the profits.”
What to Keep in Mind With Off-Market Properties
Finally, if you’re thinking of securing an off-market, ensure you are covering the fundamentals and you have a good idea regarding the value of the property, says Hiscock. You want to be well-armed with information and facts to help support where you feel the value sits. But what a lot of people don’t realise is that there is often more psychology involved than anything else.
“Go in too early and the seller might get cold feet and get rattled,” says Hiscock. “No matter what price you go in with, they can often think that ‘if that is the first offer, then there must be more’. So, often, out of nowhere, there will be a mystery decision-maker turn up or a surprise situation arises. My advice is to be wary and step carefully and strategically when seeking to secure and negotiate an off-market property.”