When you invest in real estate you make your money when you buy, not just when you sell, so, it is no wonder that many prospective property buyers are searching for a real estate ‘steal’.
But, can this really be achieved now that prices in many property markets are starting to rise?
Property buyer’s agents and experienced investors will spruik about being able to buy properties before they are open to the general market and secure some great properties that the average buyer wasn’t able to see.
When a property is for sale, but it is not publicly listed and is not marketed for sale online, this is called an ‘off-market’ property.
This is different to a ‘pre-market’ property which means a property that is available for sale but not yet listed to the public.
This is common for new builds that are in the final stages of the build or are completed but are waiting for the occupancy certificate before publicly listing for sale online, or an older property where the selling agent is waiting for professional internal photos to be taken.
Why would a seller want to sell their property off-market?
There are many reasons a seller might choose to sell a property off-market.
If a vendor wants to keep private, not letting their ‘nosey’ neighbours aware that they are selling their property they may keep the listing private and off-market.
Many high value properties will only be available off-market as a selling tactic because these high value properties typically take longer to sell and if a property is listed for a long time on the market, it may look ‘stale’ and make buyers wary there may be something wrong with it. Keeping it off-market will mean that no one will know how long it has been available for sale.
Another reason might be that the sellers only want highly motivated buyers going through their property and they do not want to go through the process of open homes every weekend.
A lot of deceased estates are also sold off-market because there are multiple parties involved and the whole process can be less stressful when it is not listed publicly, so all related parties are able to have their opinion on the sale.
Some sellers who may be elderly or have medical conditions would prefer an off-market process to take the sale at their own pace.
How to get access to pre-market and off-market properties?
Your best bet to get access to pre-market and off-market properties is through an experienced buyer’s agent who has industry contacts and first looks at these types of properties.
They will be able to keep an eye and ear out for properties that meet your specific requirements and selling agents understand that buyer’s agents have motivated clients who are pre-qualified and ready to buy.
If you would prefer to not employ the services of a buyer’s agent, the only way you will be able to get access to these types of properties is by continually contacting real estate agents in the area and enquiring about any properties they have available or that are coming up and not yet listed publicly. This can be a more tedious process and will require you to call regularly to the agents so you can be on top of any new properties.
Does buying a property off-market mean that you are guaranteed a better deal on the property?
Buying a property off-market does not guarantee a better deal at all. A seller is not going to sell a property for less than they could on the open market unless there are special conditions involved.
They will be guided on the market value of their property by the sales agent as well as the level of interest to determine how much their property is worth and then they will negotiate from there.
The benefit of buying off-market is that there is less competition. Competition can drive prices above market value, so you may be able to save yourself from spending too much and overcapitalising from a bidding war, but you are not going to get a ‘steal’ for an off-market property.
Buying off-market allows you some more negotiation power on the price and terms of the sale as well as a less stressful process.
Why would I want to buy off-market?
There are many reasons that you may choose to buy a property off-market, even though it doesn’t guarantee you will be getting a good deal.
In fast moving markets and in popular locations, you may keep missing out on properties which can be stressful particularly if you are looking for a home rather than an investment property.
Buying off-market or pre-market might mean you can get a property before the general public has a chance to see it.
Buying off-market can take some of the stress out of buying property because there is typically less competition and can avoid a ‘bidding’ war between buyers.
However, if you restrict yourself to buying only off-market then you will have limited choice.
Buying off-market could give you the ability to negotiate more with the vendors and it is easier to come to an agreement that could be a win-win for both parties.
Article source: thepropertytribune.com.au