I often get asked from buyers why would an owner sell off market?
It’s very good question. And like most good questions, the answer is not a simple one.
Carla and I sell more properties off market than most teams in Stonnington. Last year we sold 24, which works out to be roughly one in five properties.
It takes more motivation and commitment from owners (both financial and emotional) to sell ON market than off market.
To go on market you need to invest time and money in presentation and advertising – at least $9,000 for a standard online campaign. If you also require painting, new carpets, maintenance, gardening and styling this can easily rack up to $30,000 or more.
You also have to invest in the process, which can be several weeks or longer of multiple inspections a week. If you are living in the property during the campaign it is no mean feat getting the house inspection ready for each open.
Whether private sale or auction, a selling campaign can be an emotional rollercoaster, particularly if buyer interest is limited or you don’t cope well with negative feedback about your home.
For some people, selling at auction can be as daunting and nerve racking as public speaking.
As agents our preference or bias is generally to take everything to market, as it gives us exposure and profile, our clients have some ‘skin in the game’, and buyers (and potential sellers) come to us.
For an off market sale we need to actively find buyers by hitting the phones, texts and emails and scouring the buyer lists of recent sales of similar homes in the database.
We then need to persuade these buyers to take a leap of faith that the vendors are motivated, the price is reasonable and to get them to inspect, often without the aid of recent photos and/or a floor plan.
An off market campaign is very low risk to the vendors, but relatively high risk to us. If we can’t sell it, we don’t get paid. Sometimes we invest many hours of our time for no result.
For this reason, we will only run an off market process if we believe we have a reasonable chance of selling the home.
Roughly speaking, only about 30 percent of homes we try to sell off market actually sell off market.
The remaining 70 percent either go ON market (if the vendors are motivated enough), or they get put on the back burner until either the market improves or their circumstances change.
As an owner, if you’re somewhat risk averse, don’t like the idea of going through a full campaign yet have some resolve around what price you need to achieve (and are willing to be decisive if an offer is forthcoming), then an off market campaign might be a suitable strategy for you.
As a buyer, if you know what you what, are confident around values and have done your research, an off market opportunity can be a good way to avoid some of the competition of an on market listing.
As agents, we will continue to sell a significant amount of properties off market because sometimes it’s in the best interests of our clients.
If you’re considering a move and would like to discuss an off market approach, please let me know.
Feature Property: 4 Chatsworth Road, Prahran