Buying ‘off market’ is a term that is widely used in the property market, and many buyers believe buying off market will guarantee them a discount – this is just not correct.
A true off market buy means the agent has not marketed the property to anyone.
According to Principal of Suburbanite and property commentator, Anna Porter, in most cases we see ‘off market’ deals actually being pre-market opportunities but not a true off market property.
“This is because the property has been advertised to the agents own database of buyers or been offered for pre-market viewings to an exclusive group of buyers or buyers’ agents,” says Anna Porter.
“It’s a common practice of pre-marketing but it certainly does not guarantee the buyer a special deal or any kind of discount like they may have thought.”
Porter says agents will often have databases of thousands of buyers, including buyer’s agents who represent a large list of qualified purchasers and this is significant exposure of the property to buyers. This does not result in buyers getting discounts.
How often do you see properties marketed on social media? Via email? There are many forms of property marketing in 2020 and this includes strategies like:
- Marketing to the agents own database of contacts including buyer’s agents and investors
- Social media launch and marketing
- Buyers’ agent exclusive preview
- Pre-market inspections (before it goes in the local paper or on realestate.com)
These are still forms of marketing and the property is not truly ‘off market’.
“A true ‘off market’ deal is when the agent ONLY tells you about it and you have NO competition from other buyers,” says Porter.
“This scenario is very rare and usually this will only happen if there is something wrong with the property like it has termites or is falling down.”
“The agent knows the market generally won’t accept the property well, but knows that a particular buyer will see value in it.”
Most importantly, just because it is a version of ‘off market’ or pre-market, that doesn’t necessarily mean it is the right property for you to live in or invest in.
“Getting a property that meets your needs or reflects a great investment should always come first and buyers need to be cautious they aren’t buying because they feel like it is a secret deal, when often it is not the case,” she says.
Whilst some buyer’s agents flaunt stats of how many ‘off market’ deals they get, and there can be some value in this for buyers that keep missing out on property, it doesn’t always result in a cheap deal for the buyer.
“We have seen some instances where it is quite the opposite as the vendor has a price in mind that is high and if the buyers want exclusive access to that property before it goes to market they just have to meet the vendors expectations without testing it in the market,” she warns.
Porter shares the true value of working with a buyer’s agent.
“There is a lot of value to buyers working with buyer’s agents,” says Porter.
The true value to buyers who work with buyer’s agents that get a lot of off market or pre-market deals is they can:
- Receive access to properties before other buyers are offered it
- Allowed more time to consider the property
- Not feel as rushed into a decision, get all their due diligence done without pressure from other buyers snapping it up from under them
- Don’t miss out on a great property that doesn’t always make it to the broader market place.