The Secrets to Buying Off-Market Property

Off-market properties offer several advantages to buyers. However, you have to find them first. Let’s look at the secrets to buying off-market property.

There are so many ways for you to buy property.You could go the traditional route. That involves looking through listings and competing with other buyers. Sellers have all of the power in these situations. If they have multiple offers, you can only hope that yours does the job. That’s when questions like “how much can I afford to spend on a property?” become really important. If your offer can’t compete, you’re out of the running.The same goes for auctions. Only now, you have to deal with a pressure-filled environment. You’re in direct competition with other buyers. The emotion of the event can lead to you bidding more than you intended. You may win the property, but it comes at a bigger cost than you expected.There is another way.Buying off-market property eliminates many of these issues. However, many buyers don’t even know that it’s an option. They go the traditional routes without knowing that the perfect property may not even be on the market.Of course, that raises even more questions. Chief among them is “how do I get access to off-market property?”This is everything that you need to know.

What is an Off-Market Property?

Simply put, an off-market property is one that’s for sale, but isn’t listed. You won’t find it online or lining the windows of a real estate agent’s office. The seller wants to keep the sale under wraps, so they don’t advertise it.Selling off-market may seem like a bad idea for sellers. After all, the competition that listings generate often helps to push up prices. However, sellers tend to have their reasons. Some go off-market because they want to test the state of the property market without putting their homes up for sale directly. Others may want privacy, especially when selling a high-profile property. Some homeowners don’t even realise they want to sell, until the right offer comes along.This means that buying off-market isn’t as easy as it may seem. Finding such properties presents a challenge in itself.

The Pros of Buying Off-Market Property

Before looking at how to buy off-market, it’s important that you know what you’re letting yourself in for.As with any property purchasing technique, there are some pros and cons. Let’s cover the pros first.

Pro #1 – Less Competition

The key pro is that you’ll face less competition when buying off-market property.Think about the typical property sale. The seller likely hosts a dozen or more viewings before selling. Hundreds more people may see the listing online. That combines to create interest in the property that the seller can capitalise on.As a buyer, you’re in a stronger position when you buy off-market. You don’t have to worry as much about the seller receiving better offers. Typically, you may only face competition from a couple of people, if you face any at all. This means you can tailor your offers to ensure you achieve the price that’s best for you.

Pro #2 – No Spotlight

If nobody knows about the sale, nobody can talk about it. This benefits high-profile sellers. People with media prominence don’t always want their business transactions publicised.However, buyers enjoy the same benefits. Off-market property purchase provide a solution for buyers and sellers who want to avoid the media spotlight.

Pro #3 – You Get More Time

Consider the auction scenario above. When you’re in the middle of a bidding war, time isn’t a luxury that you have. You have to make snap decisions about how much you’re willing to bid. Worse yet, your decisions are final. If you win the property, you’re obligated to pay for it.A lack of time also affects traditional property sales. If the seller wants to sell quickly, you’re under pressure to make a suitable offer. You have limited time to figure out how to beat the competition, while still getting the property at a suitable price.Time is less of a factor when buying off-market property. The lack of potential buyers means there’s no rush around the property. You can take your time with due diligence to ensure the property suits your needs. Furthermore, you have more time to negotiate and come to resolutions with the seller. After all, they don’t have that many options to choose from.

Pro #4 – Better Negotiations

Speaking of negotiations, you have more leeway when buying off-market property. It’s likely that you’ll interact with the seller and their agent more than you would with other purchases.This opens up plenty of opportunities when negotiating. You can take your time to learn about the seller’s motivations. This influences the offers that you make. Plus, fewer buyers means that sellers are more inclined to listen to your offers.Because of this, you can work out deals that wouldn’t be possible with public sales. This goes for both sellers and buyers. Each can negotiate conditions and clauses in a much calmer environment. Buying off-market property thus benefits both parties.

The Cons of Buying Off-Market Property

All of that sounds great. But there are some drawbacks to buying off-market too. If there weren’t, everybody would do it.Here are some of the cons for you to look out for.

Con #1 – Finding Genuine Sellers

As mentioned, many sellers use off-market “sales” to gauge the property market. This is fine for them, as it sets them up for whenever they do decide to sell.However, it’s frustrating for buyers. If you buy off-market, prepare yourself for seller withdrawals. You may make an offer, only for the seller to tell you that the property isn’t for sale anymore.While not illegal, by any means, this tactic can still make you feel conned. Unfortunately, it’s something that you have to look out for.

Con #2 – Sellers Can Take Their Time

More time can work for or against you. If you’re looking to buy quickly, an off-market sale may not be for you. If the seller isn’t in a rush to sell, they may take months to consider your offer.Selling off-market comes with no commitments. Sellers don’t have to worry about losing money through auctioning or advertising their properties. This can work against hurried buyers.

Con #3 – The Privacy Concerns

Sellers go off-market when they want to stay out of the public eye. As a buyer, it’s often difficult to maintain such a high level of privacy throughout negotiations.You may have to sign a non-disclosure agreement, and sellers frown on buyers who spill the beans. One errant conversation could be all that it takes to thwart the deal.

Con #4 – They’re Hard to Find

The biggest drawback is also the most obvious. Buying off-market property is so difficult because such properties aren’t easy to find. They aren’t advertised, so you may have to do some digging of your own.You’re probably already asking yourself “How do I get access to off-market property?”Read on for the secrets.

Finding Off-Market Properties

The seller’s agent usually holds the key. Sellers still place their agents in charge of generating interest in their properties. The only thing that really changes is the direct advertising.But most agents also have instructions. The exclusive nature of going off-market means not any buyer can bid on the property. Usually, the seller wants a specific type of buyer, which the agent has to find.Your task is to become that type of buyer.Buying off-market property involves a lot of research and networking. The onus is on you to find the right location and to know the type of property you want. With your specific requirements to hand, start researching seller’s agents. Usually, you’re looking for the region’s leading agents. They’re the ones that off-market sellers entrust their properties to.Make contact with these agents to find out what they have to offer. You may have to sell yourself a little to get their attention. Once you have it, they’ll start providing updates. Some agents have exclusive websites for off-market properties. Others may send out emails or newsletters to a small subscriber list.Whatever the case, you have to make yourself known. Agents won’t think to inform you about off-market sales if they don’t know who you are. It’s a strange mix between secrecy and publicity.

Some Extra Tips

Those are the basics of finding off-market properties. Let’s conclude with some final tips that may make the process easier for you.

 

  • Check Property Websites: Look at the “coming soon” sections on property aggregator websites. These contain properties that aren’t on the market yet, which means you can swoop in and make an early offer.
  • Spread the Word: You can use several tactics to let agents know that you’re looking to buy. Emails and phone calls work well. You can also take out advertisements in relevant publications. Let sellers know that you’re an investor with money to spend.
  • Look for Vacant Houses: Many homeowners may end up tempted by an offer, even if they had no intention to sell. Vacant houses offer some great opportunities. Their owners may be investors, or people who can’t keep up with their mortgage payments. Search for vacant houses and contact the owners. A well-timed offer may be all that you need.
  • Look for Signs of Impending Foreclosure: It’s a sad fact that many people struggle to repay their mortgages. Most don’t want their homes to go into foreclosure, as they will lose money. If you find a property at risk of foreclosure, make an offer.

 

The Final Word

Buying off-market property comes with its risks. You can’t be sure that you’re dealing with a genuine seller until negotiations start. You also have to deal with the hassle of finding properties. This requires some legwork on your part.However, the benefits outweigh the drawbacks. Buying off-market gives you more time to negotiate, so you can get a better deal. It also works well for buyers who want to stay out of the spotlight. Furthermore, you have less competition to deal with.These are the secrets of buying off-market property. Learn from them and you may end up with a better deal than you’d get through traditional channels.