What Are Off-Market Properties And Should I Buy Them?
In This Week’s How's The Market | Edition 62
What Are Off-Market Properties And Should I Buy Them?
The Pre-Spring Reno Season
Parliamentary Inquiry Finds Victoria Should Urgently Explore Stamp Duty Alternatives
What Are Off-Market Properties And Should I Buy Them?
Off-market properties have been a hot topic in recent months around Melbourne and a conversation we are constantly having with our clients.
Why? Because one of the biggest challenges buyers are facing right now is limited stock.
As stock on market this year has been around 25% less than long-term averages and even less than last year, it is becoming increasingly difficult to find the perfect home to buy.
So then when buyers hear about off-markets from agents or see a listing without photos in the sold section of realestate.com just with an agent's face and a line saying ‘sold off-market’ many buyers become curious.
So what is an off-market?
An off-market property is simply a property that is for sale but is not listed on any of the major portals like realestate.com or Domain.
Though there are levels to off-markets. Sometimes agents will have photos taken and a listing on their company website like BarryPlant.com or Marshal White.
And sometimes they will bring us through as buyers' agents without showing the property to a single other person.
Many times buyers will be invited to an off-market open for inspection and show up to find 5 other groups that also got the same invitation.
Should you buy properties off-market?
At Tomii Buyer’s Agents, we purchase about 50% of our properties off-market.
This is because it is often easier to negotiate on off-market properties as you are negotiating against the agent and vendor, rather than another competitive buyer.
It’s easier to justify a lower price than comparable sales too as vendors will not have to pay marketing and styling fees.
A recent article from PropTrack titled PropTrack Off-Market Sales Performance Report - July 2023 found that in Melbourne, homeowners risk close to $30,000 selling off-market, on average.
This is a discount we are pushing to achieve for our clients.
Why would someone sell off-market?
It’s really on a case-by-case basis, however, we hear that it is usually for privacy reasons and vendors don’t want hoards of strangers including all their neighbours walking through their homes and staring at all their belongings.
Perhaps if they were to sell on market, it would only be after they have renovated the property including new paint, carpets and landscaping and if they can sell off-market to a keen buyer in its current condition, it would save them a huge headache.
Though a word of warning. Not all off-markets are good properties.
Some properties are off-market because they are compromised and agents are just testing the waters to see interest levels.
It’s very important to ask the agent if the property is even actually for sale as some agents will try to win listings by saying they can bring through keen buyers who have missed out on previous homes.
Though in reality, the agent doesn’t have an authority, there are no contracts available, there is no statement of information with a price guide and the vendor is not accepting offers.
So be careful.
When buying off-market, it is very important to evaluate the property correctly based on nearby comparable sales to make sure you do not overpay.
How do you find off-markets?
In short, you need to build relationships with real estate agents and consistently ask. If they remember you, know you’re a hot buyer and they like you, they will often try to help you get a property.
We will release some free training soon on our system for finding off markets. Feel free to reach out if you’re interested and we can send it across.
What The Agents Are Saying
Spring dialogue has definitely begun.
I found an off-market property yesterday with an agent and asked to inspect it. The agent contacted the vendor and the vendor said they have seen some of the recent auction results in their suburb that sold way above the range and want to run their property to auction.
Many agents, like this particular situation mentioned above, are now telling me they have a good pipeline of properties scheduled for Nov auction dates and that they are currently renovating these properties and getting them ready for sale.
Most agents are encouraging vendors to do the following to their properties:
Paint
Carpet
Light fittings
Landscaping
Somtimes new blinds/curtains depending on the property and who they are trying to appeal to.
If you’re looking to buy, you need to be finding these properties from the agents so you can get through them first and have a strategic advantage.
The Wow Factor!
6 Glan Avon Road, Hawthorn, Vic 3122
There are not many properties in Victoria that can say they overlook the Yarra River and include a private staircase to it, but this one can.
Check out this Yarra riverside oasis.
Price guide: $4,650,000
In The Media
Victoria should ‘urgently explore’ stamp duty alternatives, parliamentary inquiry finds
Housing affordability has been a big topic of discussion within parliament over the past few years and this week it has continued.
A parliament inquiry has been made to potentially abolish stamp duty and incorporate a land tax in its replacement.
If you’ve purchased a property within Victoria you’ll know just how expensive it is and you’ll also know that every little penny counts when saving for your first deposit. Paying an additional hefty tax upfront can be incredibly costly. For a $600,000 home, you would be paying a whopping $31,070 in stamp duty.
Parliament agreed that stamp duty was a very unfair tax but at the same time, it racked in $8.2b for the Victoria government just this last year financial year.
Incorporating a land tax could make entering the market a hell of a lot easier for young Australians and with housing affordability getting more and more out of reach by the day I think the government will have to eventually have to listen to the people and abolish stamp duty for good.
Final Thoughts
Off-market properties provide an exceptional opportunity to purchase property with less competition at a better price and provide a strategic advantage.
Though it’s important to remember that not all off-market properties are created equal and that there are levels to what is actually considered an off-market.
If you would like our free resource with our actual email templates, reach out and we will make sure to send it over when it’s released.
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 general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
