A short Interview with Simon Barnes about off-market sales
1. Is the concept of an ‘off-market’ sale good or bad from the seller’s perspective? Does it, for example, give their property a ‘mystique’ which can add value to the property?
Good, in that it enables a quiet sale without everyone knowing your business. In the current economic climate, where often assumptions are made that sales are forced for financial reasons and therefore can be bought at well below the advertised price – selling off market, usually prevents this. Also if the property doesn’t sell, it can be withdrawn and re marketed at a later date as a fresh property.
Do buyers get a disservice from off-market sales, because presumably many will not know of the properties being on sale?
This type of property would only be ‘offered’ to serious buyers, known to their agents to be serious and in a position to move quickly. Generally agents would only show a handful of suitable, serious buyers.
Are there more off-market sales when the housing market is strong and competitive?
Debatable. In a strong market, vendors may wish to openly market the property to ensure they’re getting the best price. In a weaker market vendors can ‘test’ the market, usually at a higher price, before openly marketing the property. ‘Super Prime’ properties are usually sold off market, as the sales process often takes much longer than with lower priced property.
Does this approach normally get a higher sale price for the seller?
Often, if it is an exceptional property because buyers will pay a premium as there is always the threat that on the open market, someone will pay more.
Is it common that prospective buyers or their agents leaflet localities or specific homes that are in demand? Does the tactic work and does it mean the buyer typically pays a higher price than would have been the case had the property been on sale publicly?
When it is done properly, but so many agents apply this method without doing their homework properly, i.e. addressing letters to ‘sir/madam’ and referring to the property as ‘flat/house’, will never be taken seriously. Vendors have wised up to this approach and 99% are ignored. An agent making a serious enquiry, will have done their homework and know the property and probably the owner, so any letters will target only specific, suitable properties.