Breaking news and updates daily. Subscribe to our Newsletter!

Home of the REB Top 100 Agents
Breaking news and updates daily. Subscribe to our newsletter

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.

Do buyers come out better or worse in off-market sales?

By Juliet Helmke
30 November 2021 | 1 minute read
off-market sales

While new research reveals that properties sold off-market tend to fetch a lower price, a seller’s level of satisfaction could depend less on the bottom line and more on what they’re seeking from the selling process.

A new report from PropTrack analysing sale prices for houses sold off-market has found that on average they sell for 2.6 per cent less than those listed on realestate.com.au.

Paul Ryan, PropTrack economist and the author of the latest report, said that vendors need to be aware that the decision to sell off-market may come at a significant cost. 

Advertisement
Advertisement

“While some sellers might be trying to save money by not advertising online, the potential earnings lost in the final sale price are estimated to far outweigh the initial cost of advertising, on average,” he noted.

“Sellers and agents both want to achieve the highest sale price possible, and we know that creating competition is the best way to accomplish that. The evidence shows advertising online draws a bigger audience, increased competition and a larger sale price.” 

PropTrack’s research revealed that sellers in NSW, Victoria and the ACT end up worse off when choosing to sell off-market relative to other states. In Sydney, houses sold off-market achieved prices 2.7 per cent lower than other sales, while they sold for 4 per cent less in Melbourne and the ACT – equating to a loss of more than $30,000 on average.

And properties on the lower end of the price spectrum took the biggest hit in off-market transactions, with homes in the $250,000 to $500,000 range selling for 3.7 per cent less on average.

Ray White TNG director Shiv Nair commented the data showed the role of an agent in extracting the highest possible price.

“With the power of online marketing, we are able to attract the maximum level of interest and attention, therefore creating the highest amount of buyer competition, which will result in a premium price for the seller,” he said.

Mr Nair pointed to his recent sale of a property in Sydney’s Glenwood that fielded offers below $1,150,000 while available for sale off-market, but ended up selling for $1,260,000 within a week of commencing a marketing campaign that included listing on realestate.com.au.

“I advised my sellers to list on the market because I believed there was a higher price achievable. After listing, we had over 30 groups on the Saturday, multiple offers, with final negotiations and contracts signed the same evening. All because of the right marketing strategy,” Mr Nair said.

Certainly, the cost of a marketing campaign can pay dividends, but as research from off-market sales platform OpenOpen indicates, the price of marketing is only one factor that has deterred an increasing number of sellers from seeking off-market sales.

OpenOpen vice-president Emilie Ouyang points to the time and hassle that can be involved in a marketing campaign involving numerous open-day inspections.

She also noted that privacy is of increasing concern to sellers today.

“It’s not just high-profile celebrities or businesspersons wanting to maintain discretion about their personal lives and fiscal transactions, but everyday Aussies who equally also don’t want family or acquaintances scrutinising their financial decisions,” she said.

The company’s initial market research also indicated that distrust or previous dissatisfaction in their dealings with agents was another motivating factor spurring sellers to cut out the middleman.

Of greatest concern was the information sellers were provided with during the process of selling through an agent, with more than half of sellers feeling left in the dark about recent sales that could be indicative of their property’s performance. Moreover, 80 per cent said they had not had their expectations set regarding the time their home might spend on the market.

Ms Ouyang reported that their platform has been receiving particular interest from overseas buyers, such as those from China, Hong Kong and the US, where off-market sales are prevalent. 

Do buyers come out better or worse in off-market sales?
suburbs high shot reb
lawyersweekly logo

Feeling burnt out? The newest event to hit the industry, REInnovate, is a must-attend for serious real estate professionals facing the pressures of a heavy workload. Get ready to walk away with the undeniable structure for success, efficiency and profitability, and get yourself back on track to focus on what’s really important for your business. Get your early bird ticket now.

Tags:

ABOUT THE AUTHOR


Juliet Helmke

Based in Sydney, Juliet Helmke has a broad range of reporting and editorial experience across the areas of business, technology, entertainment and the arts. She was formerly Senior Editor at The New York Observer.

Do you have an industry update?

top suburbs

12 month growth
Manyana
70.61%
Tamarama
70.55%
Box Hill
64.95%
Goodwood
64.38%
Bawley Point
63.64%
Lennox Head
62.11%
Casuarina
62.08%
Queenstown
61.31%
Warana
60%
Cooroibah
59.43%
SEE AREA REPORTS ON SMART PROPERTY INVESTMENT WEBSITE
Subscribe to Newsletter

Ensure you never miss an issue of the Real Estate Business Bulletin.
Enter your email to receive the latest real estate advice and tools to help you sell.