What Is Off-Market Property?

Sellers may choose to go off-market for a variety of reasons. They might be dipping their toes into the market to see what kind of price they could get for their property, or they might want to deal with the high demand you are likely to see on the open market.

Buyers often search for off-market properties as they may prefer discretion when buying, or to eliminate the competition that comes with the open market.

No information on the sale is recorded publicly until it is complete, which means there is a level of secrecy and discretion for both parties involved.

For this reason, you often find celebrities and high-profile individuals selling and buying off-market properties to avoid drawing attention to their business.

As they are not advertised through traditional means, it can be hard to find off-market properties for sale if you do not know what channels to go down. Great ways to find off-market properties include:

• Property investment companies often have exclusive access to off-market properties for sale, so contacting them to see what is in stock is a method many use when they want to find off-market properties.
• Networking with landlords and property owners is another common tactic, as peers may know of properties for sale that aren’t on the open market that could be of interest to others. This could be through social media, or through traditional methods like email and meeting people in person.
• Contacting property development companies and developers directly to see what projects they currently have for sale can give investors a direct link to potential sellers of new-build properties, meaning they can cut out middlemen who might cause issues.
• Work directly with a real estate agent. Real estate agents often have connections to off-market properties through their networks.
• Keep an eye out for industry events, where opportunities for off-market properties may present themselves.

There are a number of advantages to investing in off-market properties. These include:

• Privacy – Privacy is a key factor in off-market property purchasing. Confidentiality is maintained for both the buyer and the seller throughout the property purchase.
• Unique properties – Buyers of off-market properties may see unique features not commonly seen on properties within the open market.
• Less competition – Off-market properties are generally less sought after than those on the open market. As such, there is much less competition, making it easier to secure the property at a good price.
• Quicker sale – Due to the lack of competition, the process of purchasing off-market can be much quicker.

• Negotiation potential – Because of the reduced competition for off-market properties, there is a lot less negotiation potential. This can make it more difficult to achieve the price you want.
• Fewer choices – There are in general fewer off-market properties available than in the open market. This means investors will have fewer choices.
• Transparency issues – Gathering information on off-market properties can be more difficult, as there is less information openly available in general.
• Quality risks – Off-market properties may not have a selling agent keeping the property in good condition. While it’s uncommon that an off-market property will be in a poor state, if it is, the buyer may have to spend more to ensure the property is in working order. 

Making an off-market purchase can be a daunting prospect for the inexperienced. Keep these elements in mind when looking into an off-market purchase:

Due diligence

Make sure to do your due diligence before completing the purchase. This includes:

• Title searches
• Appraisals
• Property Inspections

Negotiating prices

Negotiating costs is an important part of the off-market purchasing process, but if you don’t know the general cost of the property, you may pay more than it’s worth. Look at local area purchases and the property itself, and negotiate according to facts and data.

Transparency and legal and ethical considerations

When you work with sellers and agents, they must conform to legal and ethical standards. Through these standards, they must be fully compliant with regulations, and remain transparent at all stages.

Documentation

Contracts are a vital piece of the off-market property purchase process, and should always be read and re-read by you and potentially a trusted party.

Contracts are a necessary element in transparent purchases, alongside other documentation. Be wary if documentation is missing or unavailable.

Off-market properties offer a more streamlined and smooth sales process for both buyers and sellers, which is why they are becoming increasingly popular for property investors who are already experienced in buying and selling.

They take away much of the hassle such as competing with other buyers and going to or organising house viewings which can cause a lot of stress and complications for both parties when it comes to the property market.

If you’d like to see what off-market opportunities are available with RWinvest, speak to a member of our team today.