Off-market properties in Melbourne are more abundant right now

I’ve gone on the record many times about the prevalence of off-market properties. Not all off-markets are good options for buyers, and many vendors who turn to off-market aren’t necessarily doing so for the right reasons. 

For a lot of Buyers Agents, citing a high percentage of off-market acquisitions is a marketing strategy. Buyers gravitate to the idea of an off-market option and sometimes don’t understand that off-markets can be overpriced or compromised.

However, not all off-markets sit in this category. A motivated vendor who chooses to sell off-market may be doing so because they have time pressure. Or they may have challenging circumstances that preclude a normal sale campaign, (such as a requirement to lease the property back for a few months).

We generally find that less than ten per cent of the off-market alerts we receive are deserving of further attention. But for this small number of promising options, they can be the answer to a client’s brief and that is when magic happens.

In the past two months we’ve noted an increased number of quality off-market properties. I’ve asked myself what could be driving this. 

Winter is always an interesting market because vendors usually like to wait it out for the Spring market. The gardens look better, the weather is more enticing, footy finals and little league is behind us, and buyers are out in force. 

Winter stock volumes can feel very limited. Off-markets are also rare, because we don’t have vendors who have just upgraded or down-sized looking to sell their current home.

This year is a bit different though. Some vendors are selling off-market with long settlements on offer. Their motivation is to allow themselves enough time to purchase their next home in Spring. Other vendors are disenfranchised investors who have decided that Victoria’s rental reforms are too onerous.

And vendors who are sensitive to the listing fees on the property search engines are also taking advantage of selling off-market and saving several thousand dollars in marketing fees. Unless their agent is able to attract multiple buyers off-market though, this reason for selling off-market can represent a false economy.

Lately, quite a few of our acquisition opportunities have also been pre-market. These are the listings that were destined for a Spring campaign, but the vendor was tempted to allow a qualified buyer through in Winter. Great communication with our local agents is the secret to this. We not only prepare a sharp list of our clients’ wants and needs, but we have dialogue about the recent previous sales that were representative of the type of property we’re searching for. When our agents know that our clients are purchase-ready with reapproval and deposit funds, and in particular, when they know our clients’ price expectations are in line with the market, the pre-market opportunities ensue.

Pre-markets might not be bargains, but they are often fairly-priced, exclusive opportunities. 

The best thing that buyers can do when faced with a pre-market opportunity relates to pricing analysis. Knowing whether the property is priced fairly or not is essential, because the benefit of social proof doesn’t often exist in these situations.

Paying a price premium for exclusivity is not a smart angle.