With house price activity showing no signs of slowing for the time being, estate agents across the uk are reporting that the market has reached a frenzied state of affairs with competitive bidding and gazumping going on everywhere.
And whilst ‘off market’ was a term only used within property clubs and networks – when large developments were offered to members in a closed sale situation – it’s now a becoming commonplace in high street agencies with far more main stream properties to sell.
Apparently ‘off market’ sales are at a four year high with 10% of homes in the UK (20% in London) being sold in this way. Its not a new thing for properties that come with a particularly high price tag to be sold under the radar – sellers of such homes may prefer viewings to be on an invite-only basis and in some cases with a non-disclosure agreement being in place to protect their privacy – but it seems that in 2021, far more modest homes are also being sold this way.
Some of this shift to Off Market is understandably due to the pandemic, and sellers not wanting to risk a viewer with Covid tromping through their house, but it’s also got something to do with the general limited supply of homes compared to demand. This puts the balance of power very much in the hands of the seller and it’s reasonable for them to be more choosy about how their home is sold. They want fewer viewings – and those that do step inside to be properly vetted and in a position to buy. So asking your agent to check out genuine, proceedable buyers and doing a deal with them seems reasonable.
But if you’re a buyer, how do you get ‘in’ on these ‘off market’ deals?
1. Use a Buying Agent.
Whilst Estate Agents work on behalf of sellers, buying agents work for the buyer. They will have close contacts with Estate Agents and could be the first person to be called by an agent with news of an upcoming listing. They will also often approach possible sellers directly, cutting out the estate agent all together and some will have wind of a property coming to market long before the seller actually agrees to it. Good agents will have built up a reputation over many years and they will be protective of this too – so if you do use one, you must be honest and clear with him/her about your position. They will also help negotiate the deal and help with the process itself. Buying Agents charge a fee for their service and you need to check out their credentials before parting with any money.
2. Be Prepared to Make a Quick Decision
Often Off Market deals are offered in this way for a specified period of time (say 24-48 hours) before going onto the open market. This may be to test the market for a property that is difficult to value, unusual or the seller and agent want to gauge interest. If you are fortunate enough to be offered something off market in these circumstances, you’ll need to know straight away if its for you – and be prepared to exchange contracts pretty pronto too. Having a clear idea of the type of property, location and price that you are seeking will help you make that quick judgement – bearing in mind its possible that you would need to agree in principle without viewing the house internally.
3. Ask Around
Friends, family, the bloke down the pub or at the gym may be brilliant connections to would-be sellers. If you let your social, business and family circles know that you are the market for buying property, they may hear about homes soon to be listed and give you the nod. There are sellers who would simply prefer to deal with someone privately, or with someone they have a direct connection with – and so the fact that you are known to them (maybe by way of a mutual friend) could give you that ‘in’. If you have this situation occur, then remember that you have you’re friend’s reputation at stake as well as your own, so as always be honest and fair.
4. Advertising Direct to Sellers
Active property investors will often advertise the fact that they want to buy homes in the form of leaflet drops, social media or local press. Doing this, may just nudge someone considering selling up, but not sure about doing so, into taking the plunge and they could come directly to you. This may be especially true of sellers who are elderly and/or inexperienced in property transactions or have a personal situation that makes selling privately more stress free and convenient for them. Advertising direct to sellers takes some effort and a good understanding of the local market – and skills such as being personable and re-assuring to convince those sellers ‘on the fence’ to sell to you will help too.
5. Check out the For Sale by Owner websites
Not strictly speaking off market – because other buyers could find the same property listed in the same place, but some sellers will list their property themselves on certain websites like Gumtree – with the idea of saving on estate agent fees and doing the sale themselves.
Needless to say if you’re looking at Off Market deals, you need to get yourself in a strong position to buy. That means having deposit money at the ready, finance in place (if using a mortgage or bridging loan) and a solicitor who can turn the paperwork around in super quick time.
I always talk about building up a Power Team of good connections and if you are wanting to buy Off Market, knowing the right people in the right places will certainly help you. It may take time to get to a point when agents come to you, but if you continually remind them that you are a serious buyer and always act professionally, then in time they will learn to trust you.