Have you ever heard about a property being sold ‘Off-Market’ and wondered what on earth does that actually mean?

There are a number of different ways that real estate agents approach the sale of a property ‘Off-Market’ and it’s important to gain a clearer understanding about how it actually works, because, after having to adapt property marketing strategies very quickly to deal with the recent impacts of the Coronavirus crisis, it now looks highly likely that listing your property ‘Off-Market’ will quickly become a more mainstream method of buying and selling property.

One of the main reasons why the Off-Market method of marketing is becoming more and more popular nowadays is due to technology advancements and the increased use of Social Media to promote property.

This week’s announcement by Australian Prime Minister, Scott Morrison which saw Auctions and Open Homes banned, will also have an impact on what marketing approach real estate agents will now be recommending to their clients, especially as we move closer and closer to the inevitable enforcement of stricter Lock Downs restrictions being imposed.

In addition, the real estate websites like realestate.com.au and domain.com.au have become extremely expensive (continually increasing their prices), and as such, real estate agents and property owners are now looking for alternative ‘low cost – high yield’ marketing strategies.

The savvy, more ‘in-tune’ real estate agents have lots of buyers that they are currently already working very closely with who are more than willing to purchase a property before it gets advertised …and from my personal experience I’ve found that these buyers typically pay fair market value and in many cases they would prefer to pay ‘a premium price’ to secure the right home that suits their family’s needs rather than take their chances of the property being advertised out to the broader market, where they could end up missing out on securing the home.

What’s One Of The Main Benefits Of Selling A Property ‘Off-Market’?

There are a number of benefits to selling ‘Off-Market’ and the first one relates to minimising the costs related to selling.

With an ‘Off-Market’ sale the owners don’t have to invest $thousands in up-front advertising costs or enter into delayed payment schemes, which can really make sense and be a large saving, especially, if the property ends up selling to a buyer the real estate agent already had on their books.

However, that’s not to say that an investment in a Marketing Campaign no longer has an important role to play in the sale at all. Far from it, but there can now be a 2 Step Approach to marketing your home for sale.

You see, the ‘Off-Market’ sale option is typically adopted for an initial period of time which allows for the agent to source interest parties via their existing database of buyers, plus, savvy agents will promote the Off-Market listing via a targeted Social Media campaign.

During the initial Off-Market period you rely on the contacts, market reach and market knowledge of the real estate agent to generate interest and encourage buyers to view your home.

What Is An Off-Market Property?

To put it simply, Off-Market properties aren’t yet advertised on the open market. Typically, when a vendor confirms a listing with an agent, it can take approximately up to seven days to compile all the marketing tools, such as signboards, professional photos, and the necessary information to load into the property portals. While the property is for sale, until everyone knows about it, it’s technically ‘off-market’.

An off market property is for sale, but it is not being marketed or advertised via the traditional channels.

Typically real estate agents use a variety of ways to market your property, including online listings on sites such as Domain.com.au and realestate.com.au, newspapers and magazines (not so much nowadays), or produce and distribute brochures, flyers and a signboard for outside your property.

On the other hand, an Off-Market approach to selling a property, often referred to as a ‘Plan A Marketing Option’ doesn’t have any of these campaigns running, however, launching a full marketing campaign could always be adopted right from the start or it could be a ‘Plan B Marketing Option’ which could be swiftly activated if the initial ‘Off-Market’ approach was unsuccessful.

During the Off-Market (Plan A Option), the agent would contact their existing buyers directly. They will source potential buyers from their database, use Social Media marketing or from people who have expressed an interest in buying property in their area.

Agents build their database from enquiries about other properties which have been listed and by collecting names at open houses and good agents keep in regular contact with these potential buyers.

"Properties are also classed as Off-Market in the few weeks before they are listed on any of the major real estate portals and they are sometimes referred to as Pre-Portal Listings.”

During this period the property can be emailed out to the agent’s database, SMS’d to potential buyers, promoted via Social Media, listed on off-market property portals or on the agent's website.

Whilst the property isn’t marketed via the traditional channels, it’s important to highlight that during this period, the property is actually for sale.

Would you consider selling ‘Off-Market’ if the price and terms were suitable?

If you live in a street or suburb where there’s been a high-priced sale recently, or there’s been extremely high interest from buyers, agents may reach out to you directly and offer you the option of an ‘Off-Market’ sale.

In this scenario the agent may already have ‘hot’, qualified buyers on their books who could have missed out on a recent sale, and are desperate to buy in your area. You could capitalise on this interest and seal a deal without even advertising your property for sale.

How do ‘Off-Market’ sales work?

If you are interested in selling your property ‘Off-Market’, you'll still need to choose the best real estate agent for the job.

In terms of your relationship with a real estate agent and the paperwork involved for an off market sale, the process is exactly the same as any other sale.

You still need to sign an agency agreement to appoint the agent for an ‘Off-Market’ sale. The agent still needs to comply with Fair Trading regulations which require an agent to have a valid authority to represent you or they could be fined.

In addition, if the property is less than 2.5 hectares a current Contract of Sale (usually prepared by a Solicitor or Conveyancer) must be prepared and made available or otherwise both the agent and the vendor can be heavily fined and/or penalised by Fair Trading. So it’s imperative that you discuss these items with your agent and/or Solicitor/Conveyancer.

So, What’s It Really Like?

During the ‘Off-Market’ phase your agent will let everyone who views your property know that it is an ‘Off-Market Sale’, so most people are unlikely to expect your home to be pristinely presented or staged by a styling company.

If someone is interested in your property, they will make an offer and the sales process will proceed as per normal. If a buyer is serious, it's recommended that you get them to make the offer in writing, and then sign an agreement as well as pay a deposit.

I have now sold several properties ‘Off-Market’, and every time both the owners and the new purchasers have enjoyed the experience.

Firstly, the owners were extremely relieved because they didn’t have to prepare their home for Open For Inspections week after week.

Secondly, they were really happy that they saved money on not having to advertise …and most importantly each of them achieved excellent outcomes.

In addition, all of the purchasers really appreciated the personalised service, the opportunity to buy with a minimum of fuss …and they were all able to move forward with a greater level of understanding and appreciation between both parties, which helped to make the whole process a Win-Win.

What Should I Do Next?

If you’d like some more information about the Next Steps and How an ‘Off-Market’ Sale Could be Highly Beneficial to You When Selling Your Acreage Property, (especially within this current climate), then don’t hesitate to get in touch with me here for an obligation-free chat about tailoring a personalised solution that works best for you.

I hope you found this information helpful.

Regards

Greg Vincent