Sometimes it just comes down to price. You’d sell if you could get what you want, though not fussed unless you can get a price worth moving for.
Once the reserve of the elite or famous, selling off market has increasingly become an option for those looking for a discreet sale. The average off market sale price has tumbled over the years with a recent report suggesting that it is now well below £900k. This suggests more sellers are opting for this route and not just those in the priciest postcodes.
We'll explore the benefits and disadvantages of selling off market and how sometimes it can help you generate the highest price for your property.
What is an off market sale?
Generally speaking an off market sale is one where the property hasn’t been listed on the open market. These days that means it’s not listed on the property portals. These portals, such as Rightmove and Zoopla (to name the two biggest in the UK) attract millions of page views a day and if your property is listed on them then it will be as fully exposed to buyers as possible. Often it also means that there is no photography or floor plans made for the property. Though this is not always the case as often a brochure is made for distribution to search agents, who often require it in order to present to their clients.
When selling off market a seller still instructs the services of a sales agent who acts on their behalf and promotes the property through their extensive networks. They will present it to qualified buyers and search agents who they believe will most likely be interested in the property.
This plays into an innate human psychology that is harnessed by sales marketeers from online stores to supermarkets - that is - to limit the opportunity to buy.
Discretion in an off market sale is paramount. It is important that the listing is only exposed to serious buyers and confidential search agents who will only place clients who they believe are serious contenders. This is because often sellers may wish to try an off market route prior to listing the property on the portals with a full marketing campaign. Usually this is because they are testing the market with a higher price, this is one of the major benefits of an off market sale. To generate the highest price possible.
This can be counter intuitive, as everyone knows the laws of supply and demand. Though the contrarian truth here is that limiting demand can sometimes lead to a higher price. How so? Because if a property is not listed on the open market buyers do not know how long it has been available for, they do not know if the price has been reduced, it all becomes rather opaque. The near term threat of the property ‘going to market’ can also be a factor that drives offers from potential buyers keen to take it before the competition gets involved. Of course both the buyers and the sellers can only imagine the demand that the property may achieve if it were to be opened up to the market. This plays into an innate human psychology that is harnessed by sales marketeers from online stores to supermarkets - that is - to limit the opportunity to buy. It means the buyer is willing to pay extra for the privilege of not having to compete with other buyers in the market.
How does this compare with a fully listed property?
When listing the property on the property portals, however, you can see when a property was first listed, how long it has been sat waiting to sell, plus you can see any reductions in price that have been applied to help it shift. This is the diametric opposite to an off market sale. In a nutshell, if your agent gets the pricing and marketing strategy wrong on your market debut then it can result in your property being seen as, ‘that property nobody wants’. This puts off buyers doing viewings and often results in low ball offers, if they come. In most cases this is simply down to the pricing strategy being wrong. In a falling market this can often be amplified, as a seller who prices too high will then follow the market down with reductions when they could have sold quicker and at a higher price if they had initially listed it lower.
If you are advised incorrectly you may end up selling your property off market under value.
Of course this is not to say that selling off market always generates the highest price. Far from it. The problem is that if you are advised incorrectly you may end up selling your property off market under value. That is much less likely to happen on the market. Because in a scenario where the property is under priced you will receive multiple viewings and offers that will drive the price to the fair market value. If you over price your property when you list it off market then you may well get a premium if the right buyer is in the market. If not, instead you will end up with potentially less interest and no offers. This can kill it for those ‘hot’ buyers if they are still in the market when and if it comes to listing it on the open market.
Why do I need an agent if I’m selling off market?
Sometimes buyers are pro-active enough to flyer properties in areas they want to buy, in the hope of generating a connection with a potential seller. Savvy buyers will use the lure of saving an estate agent’s fee in order to convince a seller that they have a unique opportunity to sell. These buyers are often well versed in what a property is worth, having viewed potentially dozens of properties on the market already. The risk here is that the seller ends up selling to a buyer that approaches them in this manner at a price below market value. So instead of generating a premium for their off market sale they are actually selling at a loss.
The fee your agent will charge is very low when compared to the cost of getting it wrong.
Instructing an agent to act on your behalf protects your interests as a seller and will prevent this from happening. Not to mention they will help negotiate a buyer’s offer up and hold the sale together through the conveyancing process if anything untoward arises. At the very least you should get valuations from local estate agents prior to agreeing a price with the buyer. The fee your agent will charge is very low when compared to the cost of getting it wrong at any point from pricing through to negotiation and sale.
Soft Market Sales
Another tactic that is increasingly being used is the ‘soft market sale’. This is an off market sale, that whilst not listed on the property portals, may well be listed on the agent's website and also promoted through social media. This often requires a little more marketing collateral to be created, such as video production, drone photography and brochure creation. It is often used when a seller is more inclined to sell but is looking to try the market first in a lower key way. It has the effect of an off market sale and puts the seller in a position to move rapidly to full marketing should they wish to progress to a sale more quickly, for example if they have found somewhere else to buy.
The highest price is usually through exposing the property to as many would-be buyers as possible.
Selling off market isn’t for everyone. It can be a used when sellers are genuinely looking for discretion or when they are open to a sale at the right price. For most properties, perhaps with the exception of those in the prime markets in central London, the path to the highest price is usually through exposing the property to as many would-be buyers as possible. That is through listing it on all three of the major property portals, presenting it to search agents, pushing it out across social networks and matching it with the agents registered database. Of course all of this does hinge on how pro-active your agent is at calling and filtering out potential time wasters. As well as how well your property has been presented to the market. Which is another exceedingly important factor in generating the highest price.
In our experience everyone’s circumstances are as different as the properties they wish to sell. Going the off market route is one of many marketing strategies that can be used by your agent. A good agent will be able to guide you and your sale through the various options available and construct a strategy that will get the best result for you and the highest price from your asset. That may be an off market approach, or it may not. Be sure to consider all your options with an expert before jumping in to the market, it could be the difference between a win for you, or a win for your buyer!
If you’re considering a sale or just looking for some friendly advice on the best way to proceed, please get in touch.
020 3150 0733 / hello@moveli.co.uk
“We achieved 12% over other agents’ valuations by selling off-market with Moveli. They were excellent.”
