Are Off-Market Properties Really That Great?
In This Week's How's The Market | Edition 40
Are Off-Market Properties Really That Great?
Supply Is 15.4% Lower Than Last Year
Chinese Student Spends $5.1m At Auction Last Weekend In Canterbury
Are Off-Market Properties Really That Great?
The short answer is yes & no.
As in yes, we often get access to properties that are perfect for our clients, that tick all the boxes and are not online anywhere including the real estate agents' website, realestate.com or Domain. This is what a true off-market property is and because of our relationships with real estate agents, we are often the first people to go through properties like this.
We do purchase these properties and in instances like this, they can be great!
Though a lot of the off-market properties that we get sent, along with the average buyer on the real estate agents' hot buyer lists, are just that - sent to everybody.
Sometimes you will arrive at an off-market property only to find 5 - 10 other groups there.
Not only that, but you need to question why someone wouldn’t want to be putting their property on the market in the first place. There can often be genuine reasons like privacy, deceased estates, unique properties or circumstances or to try to save marketing money with a quick sale offline.
Though some of the other reasons agents might opt to start a campaign off-market is because they don’t think it will sell on the market.
Some properties are in a poor condition in a poor location and agents will use off-market campaigns to gather feedback and to try to trick people into buying the property by making it seem like it’s off-market for them.
Most of the time, you will be able to get a higher price when putting a property online, spending money on marketing and driving up as much interest and competition as possible.
I would say that the majority of off-market properties are average properties at best and the minority are diamonds in the rough. Though as so many properties transact off-market, they are something you need to be across.
What is a pre-market property?
Pre-market properties are very close to off-market properties, in that they are not online anywhere, but the major difference is that these properties will be hitting the portals soon.
These can be some of the best opportunities as they are generally properties that are getting ready for listing and have been or are in the process of being cleaned up to be photographed.
Getting into a property before it goes online can allow you to complete all your due diligence and in some cases put in an offer before it comes online.
These can be where some of the best deals come from as they are usually also better quality houses.
Getting access to a property before it comes onto the market will give you a massive advantage compared to those who see it for the first time online and then in person at the first open for inspection.
What The Agents Are Saying
You have heard me say multiple times over the last few weeks that stock levels are low and believe it or not, nothing has changed…
I thought I would break down just how low these stock levels are reaching.
Below is a graph from CoreLogic that shows how much stock has come onto the market this year in comparison to 2022 and also the 5-year average.
Source: CoreLogic
Stock levels this year are currently 15.4% lower than this time last year as well as 12.7% lower than the 5-year average.
Agents have been feeling this squeeze just as much as buyers have with auction clearance rates climbing another 2.5% this week up to 57.5% across VIC for the weekend just gone.
Inner city agents have reported feeling the tightening of stock more than outer suburb agents and much more than regional agents that have adequate amounts of stock.
The Wow Factor!
One of the quirkiest buildings, but also has some of the best views!
Right on Mount Buller.
In The Media
Student buys $5.1 million home in Melbourne
A Chinese student has spent $5.1m in Canterbury last weekend on a Californian bungalow home with an initial price guide of $3.6 million to $3.9 million.
More than 100 people turned up to the auction though the Chinese student walked away as the successful purchaser who secured the property for his parents that are looking to move to Australia at some point and wanted the land to build a luxury home.
This has stirred up another debate as to whether the government should restrict foreign investors further so they do not drive up prices.
Final Thoughts
Make sure you’re constantly calling agents to get onto the off-market lists and get through the pre-market properties first.
Though remember, off-market properties aren’t everything and sometimes they are just less desirable properties.
That’s where pre-market listings can actually be better. Make sure to complete all due diligence as quickly as possible after going through a pre-market so that you can stay in front.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is my opinion, please seek your own expert advice when making decisions.
