Within the wider property market off market property is a relatively small and little known niche. If you’ve ever wondered what it is here’s what you need to know about off market property.
What is off market property?
Off market property is property which is potentially available for sale but which is not being actively promoted for sale on the open market.
Off market property isn’t being promoted by an estate agent. Off market property isn’t being listed for sale at a public auction. Off market property isn’t being promoted in any marketplace.
Perhaps oddly though, because a property isn’t on the market doesn’t necessarily mean it isn’t for sale.
In the first quarter of 2021 over 37,000 homes were sold off market, up from almost 21,000 over the same period in 2019. There were more off market sales recorded in Q1 2021 than in any quarter since 2007.
Why sellers sell off market
Sellers of off market property do so for a number of reasons:
Some sellers are looking for discretion. They don’t want anybody to know that they want to sell, or maybe have to sell their property.
Some sellers don’t want the hassle that an open market sale can present. They don’t want to conduct viewings, wait for offers to come in, consider them and negotiate. Then run the risk of the sale falling through and having to do it all again.
For some very specialist or expensive properties there are often only a very limited number of possible buyers anyway. So there is little point in advertising it on market.
Some sellers haven’t actually decided to sell their property. But they might, if they get an offer.
Celebrities, high profile individuals and high net worth individuals often decide to sell off market, but it is not restricted to these groups. Businesses including large portfolio landlords sometimes sell off market to avoid publicly revealing too many details of their business strategy.
The pros and cons of off market property
For buyers the appeal of off market property is clear. It offers a chance to buy property that other buyers and investors can’t.
Off market transactions can also be quicker and easier because the formal marketing process is dispensed with. This can benefit both buyers and sellers.
A very important point to bear in mind with off market property is that the true market value of the property may not be properly established. Because it is not offered on the market in an open and competitive way to establish what ready buyers are able and willing to pay.
This can have both disadvantages and advantages for buyers and sellers, and can also to some extent offer an opportunity. A seller might get more for their property than it is worth on the open market, or less. A buyer might be able to buy for less than in an open market sale, or they might pay over the odds.
How to buy and sell off market properties
By definition off market properties aren’t being offered on the market so they can be quite difficult to find.
Estate agents by and large are not heavily involved in this sector, although they often know who is buying and who is selling property in their area which is not formally offered on market as such. There are some specialist agents and brokers who can link up prospective buyers with prospective sellers. Property finding or buying agents are sometimes active in the off market sector.
Word of mouth can be another way of selling or buying property off market. Let family, friends, social and business contacts know that you are looking to buy or looking to sell.
Social media can also be a way of finding potential buyers and sellers.
Advertise that you are interested in buying property. Just because, by definition, you can’t advertise off market property for sale doesn’t mean that you can’t advertise that you are interested in buying property off market. Houses bought for cash type ads. in the press and social media can be a source of off market property.
Buyers could also consider making a direct approach to owners of property they are interested in buying.