Whilst there are the traditional methods of selling such as auction, private treaty, and expressions of interest, the recent property boom has seen more homeowners try the ‘off market’ method of sale.
But what exactly is ‘off market’ and how does it differ to the traditional way of selling? Several decades ago when this method first came to be, it was known as a ‘pocket listing’ or ‘silent listing’. This meant there was no advertising AT ALL, no photographs, no signboard, nothing! The agent would manually go through their card box of potential buyers and call them one by one, tell them about the property and invite them to inspect. I know because I was one of these agents!
Today you will find that ‘off market’ is not really off market at all. It does depend on the agent, however many will insist on having photos taken, they will write an advert, and advertise the property on their website. Even Domain.com.au and Realestate.com.au are in on the act and have a special section called “Off market listings” where agents can advertise such properties.
The reality is, when an agent tries to convince you to sell with an ‘off market’ strategy, it’s usually a desperate bid to win your business. In theory, it sounds great – a little less money to spend on marketing and presumably less disruption (though not always the case). However it may also result in a lower price for your home.
From my 30 years of experience in the industry, it is far better to cast the net wide and attract as many buyers as possible. The more interested parties you have, the better your chances of achieving top price for your home.
In most cases, to sell off-market means a real estate agent will rely solely on their existing database to promote your property. When you first invite an agent into your home, they will often say they have a few buyers in mind who would be very interested. They ask if they could bring them through and will try every trick in the book to get you to sign an Agency Agreement with them. Beware any agent who shows your property to a potential buyer without an Agreement in place. It does happen, is illegal, and is a clear sign of desperation on the agent’s part.
The main benefit of selling ‘off market’ is it costs only a fraction of the usual marketing campaign to sell this way. There is no signboard, minimal online advertising, and no auctioneer fees. And if the property is priced realistically, it could sell after the first showing.
If this form of sale is your preferred method, it is important to also consider the potential negative aspects of selling off market:
- If you sell too quickly, ie to the first or second buyer that comes along, you will never know if you could have achieved a higher price by going to market and having a lot more people compete for your home.
- What happens if after a few weeks, nobody is interested at the price you want to achieve? Do you give up and take the property off the market or do you progress to a full sales campaign? The longer a property is for sale, the more it devalues in the eyes of the buyer.
- How can you ensure the agent you choose has the right database with the right buyers for your type of property?
- Buyers love an off market sale as they consider it an opportunity to secure a bargain due to a lack of competition from other buyers. Is this how you want your property to be perceived?
- Remember: the agent will still charge you the same commission for putting in less effort.
Selling off-market can be a good option to reduce the associated marketing costs that come with a traditional property sale, however is it the best way to maximise your sale price?
Done correctly, an off market sale can have it’s benefits. However the timing, the agent you choose and the correct structuring of the process has a critical impact on the outcome. If you’d like to know whether an off market sale is right for you, speak with one of our Vendor Advocates for free, independent, unbiased advice. We specialise in helping sellers achieve the highest possible price for their home and at no extra cost.