Now that many agents are not allowed to auction homes due to the COVID-19 restrictions and subsequently have their vendors commit to a 6-week expensive marketing campaign, some agents are turning to ‘off market’ sales.
An ‘off market’ sale is one which is not publicly advertised to the open market. It is a marketing approach that targets one or just a few well qualified and cashed up buyers who know exactly what they want and are ready to buy the right property immediately once it’s available.
The advantage of an ‘off market’ sale is that it can save the seller both time and stress, as well as the cost of a full marketing campaign, if they do not achieve their desired price. After all, why would sellers agree to pay advertising money for an unknown number of weeks whilst their property is on the market? It just doesn’t make sense.
As a result of the decrease in vendor paid advertising, we are now seeing the major publications cease production and distribution of their usual local weekly content. This is why you will always see the media companies promoting a sale method that lines their pockets, when in reality private sales make up over 85% of all dwelling sales across the country*.
The vast majority of the money spent on web promotion is about building the agents profile or brand. There is absolutely no research to suggest that home buyers respond more favourably to a property because it is or isn’t a large expensive advertisement.
The major question facing sellers, who consider selling ‘off market’, is whether they could achieve a better result by listing on the open market. The answer is, “it depends”.
There are a few scenarios where selling ‘off market’ works best:
- During these uncertain times, and to protect the value of your property from the digital footprint, it may be worth reaching out to an agent to see if there are buyers out there prepared to buy your home.
- If the property has previously undergone a marketing/auction campaign that has failed to produce the desired result.
- When the agent has a buyer who really needs to buy but has not been able to find anything suitable. They may have sold their property and have to move or they may have some unique criteria of what they want in a property. To close out their property search some buyers will quite often pay a premium market price.
- Sellers of prestige or unique properties can be well advised to sell off market. Unique is a greatly misunderstood word in real estate. It is neither positive nor negative, it simply means it is a rare kind. Unique homes often require unique purchasers and they can be in short supply in any market. Besides, how can you have a successful (online) auction if there is only one buyer bidding for your home?
It is relatively easy for good agents to search through their digital database of buyers and match them to a new listing.
If you are going to consider selling ‘off market’, make sure the agent you select has a proven track record of selling privately to ensure they can negotiate the very best price from the buyer.