How to unlock property value in a sellers’ market

The Melbourne property market remains strong in first few months of 2022, but as expected growth has slowed compared to 2021. The market growth of 2021 was unsustainable, and experts’ consistent commentary has been ‘the property market of 2021 was unprecedented and unlike any anything we have seen in 20 years.’ Our clearance rates have remained steady in the mid to high 70’s and hit 80% weekending 27th March 2022. This continues to indicate we are still in a sellers’ property market. The question remain - Can you still buy A Grade property at a reasonable market price and not overpay in a sellers’ market?

The answer is YES but there are a few strategic factors to consider. One that I want to specifically discuss is buying OFF MARKET property.

Off market property can unlock property value for a buyer even in a highly competitive sellers’ market. That is because when we buy property off market there is low market awareness that the specific property is for sale, hence eliminating most of the competition. One of the key benefits of our Buyers Advocacy service for our clients is leveraging our extensive real estate agent connections to find these off market opportunities.

Firstly, what is an off-market property?

This is when a vendor (seller) does not want to publicly advertise their property for sale. This means, it won’t be listed on the internet on the main real estate sites of realestate.com.au and domain.com.au. The selling agent will list the property for sale and find the potential buyer through more refined and targeted means rather than the traditional mass marketing campaigns we have become accustomed. This makes it very difficult for the average house hunter to find OFF MARKET properties. Simply because most buyers, and certainly my clients prior to engaging my services as a Buyers Advocate, source property online from one or both of the sites above and have their notifications set up. I have heard countless stories of clients sitting on the couch every evening to:

·        Review their saved searches

·        Short list the properties that match their criteria

·        Plan on inspecting the shortlisted properties mid week on their lunch break or on their Saturdays.

Some of my clients have been doing this for up to 2 years with no success until finally engaging my services to then secure the right property at the best possible price within 8 weeks on average.

Why would someone sell off market?

One of the most asked questions I receive is ‘Jim – why would anyone sell off market in a hot market?’ I have to say it is a very good question and one that I have discussed at length with hundreds of real estate agents to understand the drivers of the vendors when selling off market. The simple answer is there is no one answer because everyone does it for different reasons. Here are the top 3 reasons a seller would choose to sell their property off market:

1.       Privacy

·        Many people choose to sell off market because they don’t want anyone to know about their property sale. The thought of friends, family and neighbours being aware of their home sale is not an option for some people.

·        We all know that exposing your home to the general public can be uncomfortable and some people aren’t prepared to open their house twice a week for an average 4-week sales campaign.

2.       Reduced Stress

·        Running a traditional campaign can be very stressful from preparing your home for sale pre-launch to maintenance for opens twice a week during the ‘on-market phase’ ending with the high stress of a public Auction. A specific example on an off-market property I secured recently was an senior gentleman who had lost his wife and didn’t want the stress of preparing his home for sale. We purchased the home 30 hours after the agent had signed the authority to sell the property.

3.       Time Poor

·        Life is busy and for some time poor working professional or families it is much easier to sell their home without the time and effort of a mass market campaign.

In summary, you can unlock value in the property market in sellers’ market and one way to do this is by eliminating the competition and finding off market properties.