As we enter a new decade, off-market property sales remain a hot topic as we see inner-city agencies do anywhere from 10 to 40 per cent of real estate transactions off-market — and this number is growing.
Regardless of it being a buyers’, sellers’ or neutral market, we are seeing increasing numbers of real estate agents look to off-market as the initial phase of a comprehensive strategy to win more listings and sell properties faster.
There’s a lot of discussion on the precise definition of “off-market”, which we define as properties that are listed for sale, but they may not be advertised through the standard mainstream channels.
We identify three key off-market considerations:
1. Pre-market: Properties that are literally “just listed”, meaning an agent has just signed the listing authority with their vendor. This is the time between signing and preparing the marketing materials, which is valuable time where a serious buyer could be made aware of a property.
2. Affordability: Vendors may choose to sell off-market due to budget reasons, avoiding upfront VPA costs.
3. Privacy: Some vendors such as celebrities or high-profile business people may seek a more discreet approach or they don’t have an urgency to sell.
The traditional, non-technology-driven approach to selling off-market sees an agent work their own database of buyers, which excludes any other hot buyers out there not within the agent’s network. For buyers that are not registered on any agency databases, they’re required to proactively get in touch with their local agencies and request to be placed on their off-market notification list, or otherwise miss out.
In an era marked by instant gratification and audiences accustomed to immediate Uber and Tinder-like experiences, the natural extension is to move real estate from hours and hours of online property “search” to real-time property match alerts.
If you’re a vendor in Melbourne and cannot afford the average upfront marketing costs of $6,500 to $8,000 to run an on-market advertising campaign, this is where off-market really comes into the equation.
Some vendors may choose to sell off-market because they’re not in a hurry to sell, and it’s a great way to test the market.
An agent can create as much buzz and urgency (if not more) as an on-market campaign. There’s the exclusivity factor of knowing about a property before everyone else. There’s also the opportunity to secure a premium before the property goes on-market. Off-market properties often attract buyers that have spent months and months searching online and filling up their weekends attending open for inspections. They are willing to pay a premium because they are tired of house hunting.
Some may argue that selling property off-market risks underselling because the property has not been fully exposed to the market. It only takes one buyer to sell a property, not 20. An agent with excellent negotiation skills and a commitment to getting the right price for their vendor will never allow a property to undersell. Today’s vendors are information rich and have the ability to identify what is a fair and reasonable price.
In 2020, agents that don’t add a “just listed” or off-market strategy to their sales funnel will get left behind. In a world full of choice, agents that are proactive, understand their vendors’ needs and use technology to their advantage will truly stand out.
By Rhett Dallwitz, Listing Loop chief executive officer