The property market’s a jungle right now. There’s a shortage of homes, so increasingly desperate buyers are fighting like tigers and alligators to snap up the few gems available. However, you might not actually get the chance to view some of the best properties available these days. Why? Because they’re being sold discreetly to waiting buyers before they’ve even been advertised. In fact, more than 37,000 of these ‘off-market’ homes were sold in the first quarter of last year alone, which is a new record.
Because these off-market properties tend to go faster than speeding cheetahs, you’ll be left behind unless you know how to navigate this trickiest of property terrains. Fortunately, we’re here to bring you up to speed; so you’ll understand the pros and cons of off-market properties and where to find them. Read on and you’ll be ready to pounce…
What are off-market properties?
Off-market properties are homes that are available to buy but never marketed to the public. Therefore you’ll never find these lesser-spotted residences on Rightmove or Zoopla, at auction, or indeed in any estate agent’s window. Only a select number of buyers ever hear about them.
Traditionally, selling off-market was something reserved for the rich and famous, who don’t want any old Tom, Dick or Harry traipsing around their home. However, the practice has become more common over time. In fact, high volumes of prime-location properties (especially in London) have been sold this way for years.
Because demand far exceeds supply at the moment, more and more affordable family homes are being sold off-market, too. They don’t have to be luxurious; they just have to be good homes in desirable locations that are attractive to multiple buyers. Consequently, off-market properties have become an invisible yet lucrative subsection of the market.
Why sellers go off-market
It’s conventional wisdom that sellers want to attract as many potential buyers as possible to create competition. However, this doesn’t work for everyone. Some vendors simply want a quick sale, a private sale, or a sale that involves minimum fuss. After all, who wants to prepare their home for multiple viewings if you can find a buyer straight away with no hoo-ha?
Privacy is one of the biggest motivations to sell off-market, especially for those in the public eye. But some people (whoever they are) just want to sell without the neighbours asking awkward questions. If you’re getting divorced or selling due to financial problems, for example, then you’ll want to keep things hush-hush.
Going off-market also suits sellers if they’re only interested in speaking to serious, proceedable buyers. This will help the sale to go through faster. Landlords might also prefer an off-market property sale if they don’t want their tenants to find out.
Why buyers go off-market
The longer a property has been on the market, the better price you can negotiate. So why would you want to buy a home before it’s even hit Rightmove? Well, those who buy off-market properties have a very different perspective. They’ve often been looking for a particular type of property in a certain area and with specific features for a while. And they’re quite prepared to pay a premium for exclusivity.
What’s more, those buying off-market properties are usually in a very strong position; therefore they may only want to deal with serious sellers who want a swift exchange and completion, too. They might even be investors or landlords who want to keep existing tenants in the dark in case they panic and move on.
Finally, off-market buyers might be happy to pay more if it avoids the stress of a bidding war or sealed bids. If you’ve got the means, and you’ve found the house, why risk losing your ideal home to a rival buyer?
How to buy off-market properties
There are a few different ways to track down off-market properties. But the most common is to make yourself known to all estate agents in the area. Tell them precisely what you’re after and build a relationship with them. Then you’ll be top of mind whenever a home that meets your criteria pops up.
Remember that some sellers want their homes to stay below the radar. Therefore, if an agent has a list of waiting buyers, and a deal can be arranged quickly, then it could suit all parties – including the agent. After all, the agent will earn their fee without having to spend time and money marketing the property.
Your other option is to hire a dedicated buying agent – someone you appoint to do the groundwork for you. These specialists will know the area inside out and already have established relationships with the relevant agents. So, if anyone knows how to find off-market properties in a particular area, it’s them. Indeed, some buying agents actually specialise in off-market properties.
Having said that, however, you might want to sidestep agents altogether and save the seller some lolly by approaching them directly. For example, you might hear about a property through friends or family. Or, if you’re not too shy, you could always knock on the door of a property that looks great and speak to the owner. They might be a bit surprised, and there’s a high chance you’ll be rebuffed, but you never know your luck.
Finally, you could always advertise yourself as a buyer. Put an ad in the local paper that says what you’re looking for. You could even drop leaflets through letterboxes in particular streets. If someone’s looking to move, they won’t have to pay an agent if they’ve already found a buyer in you.
Off-market properties – the verdict
Some people are determined to ‘test the market’ by showing their property to as many people as possible. And there’s nothing wrong with that. However, if you’re after a quick no-nonsense sale and want to stay off the grid (whilst securing a good price) then selling off-market is a great option.
Off-market property sales have other advantages, too. For example, if your agent isn’t sure how to value your home, and you’d like to test a higher price first, then showing it privately to waiting buyers can generate invaluable feedback before you go public. Launching publically at a too ambitious price point can be a big mistake that harms your negotiating position in the end.
As for buying off-market properties, there are some advantages but also some disadvantages. For example, you’ll possibly never see full property particulars containing photographs, a floor plan, and the home’s EPC. This can make it harder to compare the properties to others. There’s also an expectation that you’ll exchange and complete quickly. This might put you under undue pressure.
However, if you’re a motivated buyer, your finances are in place, and you know exactly what you want, then purchasing an off-market property could suit all parties like a leopard suits its spots. The result? You’ll hack through that property jungle quickly and won’t get gazumped by a gator.