The pros and cons of selling off-market
There are various methods by which property can be sold, with sale types ranging from auctions and private treaty to expressions of interest.
One increasingly popular sale type is the off-market method, where qualified and highly motivated buyers are invited to inspect and make an offer on a property before it is formally listed for sale.
In this case, the notice of sale is typically shared with a limited number of property seekers through off-market listing platforms or buyer’s agent networks. This gives the seller control over who can view and inspect the property while reducing the costs of selling and marketing.
In this blog, our agents take us through the pros and cons of selling off-market, so you can make an informed decision as to whether it’s the right approach for you.
The pros of selling off-market
Potential savings – selling off-market can save the seller money on the listing. Offers can be submitted, reviewed, negotiated, and accepted before investing in external marketing options or auction fees.
Reach the right buyer – off-market sales allow sellers to cut through the noise and only invite qualified and highly motivated buyers to inspect a property.
A popular way by which sellers can reach these types of buyers is via buyer’s agents, who are employed by highly motivated buyers to help them secure a property. Buyer’s agents will proactively reach out to real estate agents with their buyers’ search criteria, with the agents then notifying them of suitable upcoming off-market sales.
Another way to reach qualified buyers is through online off-market real estate platforms which require buyers to provide specific criteria. If a property matches their criteria, the buyer is notified immediately.
No open homes – an off-market sale means fewer buyers and less foot traffic through a property, reducing the need to prepare and stage the home for potential buyers and open the home for regular inspections.
Test the market price – selling off-market gives sellers a picture of the property’s saleability, testing the market’s response — both positive and negative—and gauging price expectations. If a property doesn’t sell off-market, vendors can then take it to the open market with a clear price strategy and realistic expectations.
Less pressure – because an off-market listing doesn’t have an official start date, sellers can take their time and test the market out without fear of a negative impression from potential buyers. The longer a property spends on the open market, the more lowball offers it will attract.
Get your requirements met – reduced competition can allow sellers to develop a personal relationship with buyers, in which the buyer can better understand the seller’s reasons for selling and make offers that meet their needs outside of just price.
More privacy – choosing to go with an off-market listing allows sellers to keep their property away from an open real estate market. No public listing, no auction, and no open homes afford sellers greater privacy.
Faster transaction – by avoiding the length of a typical sales campaign, which can sometimes take several months, sellers can achieve more immediate results.
The cons of selling off-market
The risk of not reaching the best sale price – typically, higher amounts of buyer interest in a property means greater competition and a potentially higher sale price. Fewer buyers mean fewer offers and less chance of a bidding war, which could potentially see the property sold at a lower price than if it were listed on the open market.
Slower sale – there are no counting ‘days on the market’ when selling off-market; however, sellers may have to be patient. Off-market sales are all about attracting the right buyer, and in the case where it takes a while to find the right person, a property is obviously going to take longer to sell.
Overlooked fees – typically, off-market platforms charge a listing fee when a property is sold, which can be easy to overlook during the sale transaction. Sellers should check the fees payable before the property sells, so there are no surprises at the end.
Wondering if an off-market sale is right for your circumstances? Our agents know the ins and outs of selling property off-market, and as trusted real estate advisors have extensive experience in advising on the right sale type for each vendor.
Speak to your local Hockingstuart agent today to learn more.