The chance to find a new home or your next investment more quickly, without competition and in a less stressful environment sounds pretty appealing. Off-market properties or silent sales, are properties that are not advertised on the major listing portals.
At a time when prices are rising rapidly, demand is through the roof and stock levels are low, it is easy to understand why off-market properties are so sought after amongst buyers.
The latest CoreLogic data shows median dwelling values in Sydney are now up 7.5 per cent over the past year, and were up 2.4 per cent in April alone. It follows several months of boom-era demand and strong sustained price growth.
Weekly auction clearance rates give a sense of the strength of the market. Every weekend this year, the percentage of properties taken to auction each Saturday that have sold under the hammer has been at least in the high 70 to early 80 per cent range. That’s impressive.
Drilling down into the auction data also reveals some interesting trends. For one, lifestyle markets are performing especially well, showing strong demand for properties that are located by the sea, harbour or beach.
And secondly, high-end property continues to surge in demand, with more premium suburbs having the strongest auction markets. That mirrors an almost nine per cent jump in median values for prestige properties over the March quarter.
So, when a market is as hot as Sydney is at present, why would any vendor choose to sell without exposing their property to the open market?
Vendors decide to sell their home or investment off-market for a number of reasons.
The most common one is privacy, especially in premium pockets of the city, where people are less likely to want images of their pride and joy online for all to see. And they certainly don’t like the idea of tyre-kickers traipsing through the open inspections.
Off-market deals also appeal to those who seek a quick sale, either due to a change in personal circumstances, such as a death in the family or divorce, or a move interstate or overseas. A 3 – 4 week campaign doesn’t suit everybody’s schedule.
And a big motivator is convenience and ease. Right now, when there are significantly more buyers out in the market eager to make a deal than there are properties, sales agents have a list of prospects ready to go.
So, how do potential purchasers access these off-market deals themselves? Is it even still possible?
It’s certainly less possible than it was several months ago due to the strength of the current market. Engaging a strategic, experienced and well-connected buyer’s agent is your key to unlocking any off-market opportunities. They have an established network in the sector and can source deals on your behalf.
Buyers’ agents are on the ground in the market each day and know how fundamentals are working and shifting. They can assess the pros and cons, weigh up the risks and look at an opportunity with a clear head.
Working alone in a red-hot market leaves you vulnerable to making costly mistakes. For one, doing quick due diligence when you’re presented with an urgent opportunity is risky, because you might miss the warning signs of a dud deal. You’re also more likely to make concessions that you might later regret.
Paying too much in an off-market transaction is entirely possible, despite the assumption that you’re more likely to score a better deal without competition. When you have to make a quick decision and you’re worried about missing out in a frenzied market, you might wind up paying more than you should. Put it this way, everything in Sydney can be for sale at the right price! So the temptation of the off-market bargain can lure unsuspecting buyers into paying far more than a property is worth.
There are countless examples right now of buyers who threw money down prior to auction to secure a purchase and avoid having to compete. I have no doubt many paid too much.
Going it alone in a market like this presents a whole host of additional hurdles and possible pitfalls to dodge.
On top of that, you run the risk of missing out on potential deals that could save you time, money and angst; opportunities that are near impossible to unearth on your own.
A buyer’s agent can work with you to determine your needs, wants and budget, and then go out into the market on your behalf to find properties that fit the bill. This includes off-market deals that you would not otherwise know about.
They can then negotiate with the seller’s agent for you, removing the stress and helping to secure the right property at the lowest possible price.