Updated: Jan 7, 2021
The talk of finding off-market deals is often mentioned as a great way for buyers to save on purchase price or to buy their absolute perfect property, whether it’s as an investment or the family home. This is definitely the case, but off-market properties and deals offer upside to both buyers and sellers.
Sellers may consider selling off market for a number of reasons. It can be beneficial for vendors who wish to remain anonymous for any number of personal reasons. Off market deals also mean they generally save paying a commission to a sales agent if no agent has been engaged, meaning huge saving for them as sellers, some of which can be passed onto the buyer. The process of selling of market can also be much quicker than preparing the house for sale and running a marketing campaign, which for some sellers is critical and takes away a lot of the stress associated with selling a property.
Off-market deals through Sellers Agents
Even when Sellers Agents are employed it’s often in their personal best interest to sell the property off-market. Although Sellers Agents are always meant to work in the best interest of the seller, some agents will try to convince vendors that this is the best deal for them as to be honest, a quick sale means a quick commission for the Sellers Agent. Doing so also means sellers who wish to be discrete can also remain so. This gives well connected buyers such as Buyers Agents access to many properties before they are marketed to the public as Sellers Agents will often call these buyers first, knowing these buyers are normally ready to purchase and in the hope of getting that quick sale.
How can off-market deals be found when no agent is involved?
Off-market deals are also often private treaty deals. These deals usually occur between friends, family and other people who have somewhere crossed paths. They also arise from savvy buyers who simply pound the pavement and go door knocking in areas of interest. But the majority of deals are driven by Buyers Agents themselves.
Buyers Agents are constantly on the ground, talking to agents and homeowners each and every day. They have a wide network of Sellers Agents and potential sellers which they can leverage into finding great off-market deals.
Tip: Look for properties that have been vacant for extended periods of time, often these owners may be more likely to entertain an offer.
Why buying off-market can be great for buyers
The main reason buying off-market is beneficial is because there is generally no competition at that point for the property, and therefore no one to bid against you, unlike in an auction or on-market campaign. The lack of competition can also create a sense of urgency for the vendor, making them question whether an offer like yours will come along again.
For this reason, it is crucial to try and understand the vendors reasons for selling. If it is a forced or distressed sale for reasons such as a divorce or estate settlement a below market value offer may have a good chance of being accepted immediately, but if the buyer is the party initiating negotiations the only wiggle room in negotiation may be in the possible Sales Agent fees the vendor will save on by proceeding with you. Either way, having a strong comparables and market research to guide your negotiations should result in the purchase of the property at below market value.
Difficulties buying off-market
Finding genuine sellers is by far the most difficult part about conducting off-market deals. Without having relationships and knowledge with the property and locals’ agents and sellers, sellers can often be misleading when indicating they are interested in selling and can often lead to sellers receiving offers just to say the property is no longer on the market.
Sellers can take their time, and waste yours. Although this slow process can help buyers do their due diligence thoroughly, when sellers don’t have a need to sell quick often these deals can take a long time to go through. As selling of-market comes with no commitments by sellers in the form of fees to accept offers and can work against hurried buyers. Different negotiation tactics can be used to create a sense of urgency for vendors to work in the favour of buyers.
Privacy concerns can be a big issue for buyers and vendors alike. While vendors may use an off-market sale as a way to stay anonymous and non-disclosure agreements are often signed, often deals are cancelled due to conversations had by both parties. A buyer who is also wishing to keep private can also often be challenging, which is where the service of a Buyers Agent can also be very useful in negotiations.
Ultimately off-market deals do involve some risks and are very hard to find, involving a lot of hours and work committed to finding them. Learn and apply this information and hopefully you too can see the benefits of acquiring an off-market deal.
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