With the market cooling in some pockets of the country, more properties are being offered off-market but how do you know what is a true off-market property that presents an opportunity without the normal competition and at a fair price?
Real Estate Buyers Agents Association (REBAA) Victorian spokesperson Leigh McConnon said there were some typical warning signs that a property being offered was not legitimately off-market.
These include a blanket email sent to several other recipients, if there is no price given or if the sales agent is unclear on the vendor’s motivation to sell.
“If the communication indicates that the vendor would look at offers prior but if they do not achieve their price they will be going public on a certain date, then walk away,” said Mr McConnon.
“This a clear sign that the vendor is likely to have a public campaign unless they can achieve an above market price. This is an upcoming listing, not a true off-market.
“Another obvious sign is if in your communication with the selling agent he sends you marketing pictures and brochures for the property.
“A vendor who is wanting to sell off-market would not go to the effort and cost of having professional photos taken.”
According to Mr McConnon buying off-market can be a great way to buy but it’s important to do your homework and make certain that you ask a number of questions before making an offer.
He stressed the importance of always undertaking the appropriate due diligence to avoid overpaying, regardless of whether or not the property was off-market, an upcoming listing or publicly available.
“It is also important that in your negotiation with the selling agent, you are as specific as possible with your criteria,” he said.
“Or even better engage the services of a buyer’s advocate, who will not only have great relationships with agents to gain access to off-markets but may also be approached directly by a seller to find a buyer in this manner.”
REBAA recommends the following questions you should ask your selling agent to determine whether or not the property is off-market:
1. Does the sales agent have the authority to sell the property?
Often an off-market listing can be a marketing ploy to demonstrate to a potential vendor that they have buyers at a price point they would be happy to consider. If the sales agent does not have the authority, they are not in a position to sell the property. If the agent does have the listing, ensure that you are only dealing with the listing agent who has direct access to the vendor.
2. Does the sales agent have the contract of sale prepared?
Without this the property cannot be sold.
3. Has this been sent to their database or only a select few?
Or even better if it has only been sent to yourself? The fewer people the less potential competition.
4. What are the reasons for the sale?
There must be some type of motivation to sell in this way without a public campaign. Without a sufficient reason they may just be fishing for early offers or determining potential competition before listing.
5. Is a price point being given?
If there is none, then how do you know whether they will sell and at what price.