Off-Market sales (also known as ‘private sales’) make up a surprisingly large chunk of the London market.
Around half of all property, by value, is transacted ‘off-market’. In the 10 million+ bracket, this number jumps to almost 80%. So, there is a lot happening behind the curtain, that most people never see. Let's take a look at what is happening out of view...
The standard way of selling property is to market it, in a wide variety of ways, with the aim of reaching the largest number of potential buyers. Some of these marketing methods include placing ads on property portals and various other websites, in print, via posters in Estate Agency windows, and even ‘For Sale’ boards outside the property itself.
For most properties this is the best way to go, as the goal is to let as many people know about the sale as possible. The more people you tell, the bigger the ‘catchment’ of your target buyer group, and the more likely you’ll be to find a buyer.
What is off-market selling, why would you want do it, and is it the right strategy for you?
There are some properties (or circumstances) though, that invite a different approach - something very discreet. This is where ‘off-market’ (or ‘private sales’) come in; off-market property is sold without ever being advertised to the general public. The sale takes place privately and discreetly, behind closed doors, so to speak. This discretion may be an advantage, or a hindrance, depending on the circumstances.
For whom might this be a good strategy?
Perhaps you have a strong desire to keep the fact that you’re selling private; with an off-market sale your friends and neighbours needn’t know you’re selling.
Perhaps you need a fast sale. A private sale might be a sensible way to speed up your timeline; no time wasted with a marketing campaign, no lengthy negotiations with buyers.
Sometimes the property you have to sell is highly unusual, and may be difficult to sell via normal methods. Think remote properties, estates, castles, or derelict sites.
The more expensive a property, the fewer buyers could afford to buy it. Imagine you’re selling a £40 million mansion in Mayfair. The pool of potential buyers for such a property is actually incredibly small. There isn’t a need to alert the entire market about the sale, as the vast majority of market participants would not be financially equipped to make such a purchase. Whatsmore, the small pool of target buyers in this case are unlikely to be searching for homes on Rightmove, or wandering the streets checking in estate agent windows. For a unique and very high value property like this, a targeted strategy works best - reaching out to your target market directly & discreetly is more sensible than a ‘spray and pray’ approach.
Most commonly, private sale is used because the target buyer pool is very small, and very affluent.
So, what are the pros & cons of an off-market sale?
- Potential for a quicker sale – if the seller prices keenly.
- Privacy - your neighbours and others needn’t know you’re selling.
- If your property is unusual, you can prevent it sitting on the open market for a lengthy period (which could negatively affect price).
- The possibility you will get a lower price than if you advertised your property
- If your agent isn’t well-connected the process may be very slow, or not work at all
WHAT ABOUT THE OFF-MARKET PROS & CONS FOR BUYERS?
For buyers, accessing the private sale market is all upside, and the upsides of buying in a private sale are fairly obvious. Privacy and discretion are important concerns, especially for high net buyers; a home sold privately offers you the chance to avoid the glare of the public eye, and rest assured that your new home's price, layout and appearance hasn't been splashed all over the internet and high street.
Another key benefit of private sale is that unlike a standard purchase, the process is being handled on both ends by professionals - each side is represented by a retained agent. This tends to accelerate the process enormously, and lead to smoother, more efficient transactions, with a lower rate of fall-through. Buyers and Sellers who have taken the time to seek out quality representation tend to be committed and well-placed for a successful negotiation, and things can move swiftly and smoothly, under professional guidance.
How can I find and buy off-market property?
You'll need a well-connected Buyer Agent or Property Advisor. There is no way for buyers to access the private sale market directly, but a good 'Buyer' (the name we give to agents that represent buyers) will conduct the search on your behalf, and show you all of the properties that fit your brief, both on and off the market. Look for an agent that specialises in the market you want to buy in, and go for one that represents buyers (not sellers) for the bulk of their day-to-day work.
Finding off-market stock is about having great cross-market relationships, so you’re best placed for success if you choose an independent agent (who can work across the entire market), and one that has a good reputation and communication style - both of these things are essential to doing the job of Buyer’s Agency well, so these attributes should be at the top of the list when you seek out representation.