In the decades past, off-market or “silent” listings were generally associated with prestige properties sales. These vendors often preferred to sell quietly, and certainly did not want to open up their homes to the general public. However, in recent years we have witnessed a dramatic increase in the proportion and type of properties sold in this manner. It’s no longer the realm of the rich and famous, and anonymity is definitely not the driving force. So what is fuelling the trend of off market sales? In a nutshell, it’s a product of extremely low turnover in a highly competitive industry.
We are often asked, ‘why would a vendor sell off market?” To assist with answering this question we have interviewed three leasing agents in three different markets to get their view points; Debbie Donnelly – Partner at Phillips Pantzer Donnelly in Woollahra, Adrian Oddi – Director at Bresic Whitney in the Inner West and Scott Thornton – Partner at Simeon Manners in Mosman.
These and other leading real estate agents are now making it easier for potential vendors to list their properties by removing the upfront marketing costs associated with a traditional auction campaign. Vendors can list their property “for free”, and don’t need to commit to photo shoots, floor plans or a schedule of regular open homes. Essentially they can “test the waters” with an agent’s database of buyers. As Adrian Oddi, Director at Bresic Whitney in Balmain puts it, “a tangible offer off-market can give potential vendors the courage to commit to a quiet sale or a larger on market campaign”.
Courage is a key issue for vendors right now. Scott Thornton, partner at Simeon Manners in Mosman says, “Vendors have been very cautious to sell due to the fear of not being able to purchase a new home of their own”. Listing off-market can potentially allow vendors the flexibility to establish a budget for their next property, and then sell only when they have secured it. This flexibility coupled with a general perception there is an oversupply of buyers, can give potential vendors the confidence they need to take the next step.
Debbie Donnelly, partner at Phillips Pantzer Donnelly in Woollahra also points to an obvious factor at this time of year – ‘timing’. With less than 2 weeks now left until Christmas, many motivated sellers simply don’t have the time to run a traditional auction campaign. Many have just bought and need to off-load their current property as quickly as possible. Additionally, many properties slated for an auction campaign early next year can also be accessed off-market by qualified buyers.
As a buyers agents, everyday Prosper Group are receiving off market opportunities. We have qualified buyers ready to purchase and are perfectly placed to take advantage of these quiet listings. Apart from seeing properties which our clients most likely wouldn’t have otherwise seen, we also have the skills and experience to evaluate the property and negotiate a deal quickly, before other buyers have even had the chance to inspect.
Bresic Whitney and Phillips Panzer Donnelly now estimate 15-20% of their total sales are in the off-market format. Scott Thornton of Simeon Manners states, “An experienced agent with strong database-driven relationships is ideally placed to secure vendors an off-market sale in the current environment”. He adds “I would be saving my vendors their marketing costs on up to a third of my sales currently”.
All three agents commented that to be advised of an off market opportunity the agent must believe the buyer is a genuine buyer ready to purchase.
So for many of our clients, particularly at this time of year, the likelihood of purchasing an off-market property is increasing considerably. An experienced buyer’s agent is the best way to ensure you are covering the market and not missing out on great opportunities and potentially your dream home.