One of the benefits of using a buyer’s agent is to give you access to 100% of the market. If you are searching for a property you can see all on market properties as they are listed on realestate.com.au and domain.com.au. But there are two other categories to consider; pre market and off market properties.
Pre market properties are those that are soon to be launched on market. I will often look at properties on behalf of my clients while the marketing photos are being taken, so I have a head start on the rest of the buyers.
Off market properties are those where agents know the vendor will sell but for the vendor’s personal reasons they do not want to list online.
You may be able to get access to some off market properties by speaking to individual agents who you have met through open inspections. But it is unlikely that you know and will be speaking to the 30-40 agents who work in each area. At Rose and Jones we have built up our relationships with agents over the past 22 years. There is an unwritten code of conduct about how to deal with off markets and the importance of confidentiality. Agents will not trust all buyer’s agents and purchasers with off market properties.
We have a database of off market properties which currently details over 1,000 properties across different suburbs and price brackets.
Typically for a house search in the Eastern Suburbs, and especially around the higher price brackets, I would estimate 50-60% of available properties are off market.
Why would a vendor have their property off market?
There are genuine reasons that a vendor may prefer to have their property off market. For example, they could have young children and don’t want to have to prepare the home for open inspections twice a week for six weeks, or they may be high profile and not want a lot of people having a look at their house.
But are they actually realistic or are they just waiting for an inflated, above market price? Yes, this can happen! But a good buyer’s agent will provide a valuation of the property, backed up with market data to provide their client comfort of the property’s true value. We will use this data to negotiate with the agent. If the vendor is unrealistic then we move away from the property. However often our analysis will be used as an education piece with the vendor to show what the market values the property at.
Absence of competition
For on market properties, and especially if the property is being sold at auction, it is transparent how many buyers are interested and what price they are willing to pay. However when purchasing an off market property there will often be no other buyers who know of the property and no other offers. This lack of open competition means that as a buyer you have to be certain that the price you are paying is what the property is worth, rather than what a selling agent is telling you or what the wish price of the vendor is. A buyer’s agent should be able to give you this assurance.
How many off market properties do you buy?
At Rose and Jones, off market properties are very important. In the 2019 year over 28% of the properties we purchased for clients were off market.