‘Off Market’ Property – The Facts

The first thing many potential clients ask me is “How many ‘off market’ properties can you find?” Now there’s a lot of buzz and hype around ‘off market’ properties. It’s true that some fantastic properties never reach the open market. It’s also true that the ‘off market’ mystique can confuse and mislead unsuspecting buyers. Ambition and aspiration are fine qualities in any property search, but hype & confusion are best avoided.

Hence this brief guide to the myths, secrets and facts about off market properties.

Most people assume the open market is listings on national websites like Rightmove & print ads. In fact it also includes estate agents mailing lists. But many estate agents will have a general mailing list and a ‘reserved’ or ‘discreet’ list. The discreet list generally includes some ‘Off market’ properties. However many of these reserved properties will not remain discreet all that long if viewings don’t materialize swiftly. Such instructions soon make their way onto the open market. Selected properties that remain on the discreet list – and some that were never there anyway but aim to sell with minimal marketing – may fairly be regarded as off market.

So what keeps properties off market?

Prime pricing is certainly one factor. I would say most off market properties exceed £2 million.

(Now if you have a lower budget than that, please don’t despair. Chances are that I can get you viewing desirable and suitable properties before they reach the open market. These are best described as ‘pre-market’ properties. As soon as these go public, they will attract lots of attention – 70%+ of viewings will usually take place within 2 weeks. So speed is of the essence to avoid missing out here.)

Another factor is that off market vendors will have legitimate reasons for maintaining discretion when selling. High value properties may invite the attention of burglars and other undesirables. Some property sales may stem from unfortunate life events (divorce, financial problems, inheritance/ estate disputes) where vendors understandably wish to keep prying eyes and gossip to an absolute minimum. In some cases viewings may even be conditional on signing a confidentiality agreement.

In other cases, vendors may ask their estate agent to pre-screen potential buyers. This might be to ensure only suitably qualified and proceedable buyers are granted access to view. Or it might be that they need flexibility on (say) a long completion date if their own plans are at an early stage, or if they are engaged in a complicated relocation abroad.

In such situations the trust and confidence a good property search agent has built up with estate agents creates opportunities to view properties that will simply never reach the open market.

But on the other hand, off-market properties may represent a price support operation, where a marketing aura of exclusivity and privilege disguises toppy pricing. There’s nothing wrong with an estate agent trying to get the best price for any vendor. Be honest – who amongst us, upon being delighted by a proposed asking price for our own house, has responded “Really? Goodness, we couldn’t possibly ask that much!”? Less reasonably, estate agents may face a vendor insisting on an unrealistic asking price (“vendor valuation”). If the agent don’t market at that price they won’t secure the instruction – even if they suspect that only the foolish will pay such an asking price.

In such cases, avoiding exposure to open market scrutiny aims to disguise a probable lack of interest at the asking price. This makes it harder to tell when a property has been marketed for (say) 6-12 months with few viewings and little prospect of a successful sale at the asking price. A practiced buying agent will spot that there are (or have recently been) better properties at the same price point on public view – or equivalent ones at lower prices.

In these situations the property will often come on and off market for 2 years or more, with multiple changes of agent. In my experience, if a susceptible buyer doesn’t show up in the first few months of marketing an over-priced property, they’re unlikely to show up at all. And any buyer who incorporates a valuation as part of their survey will expose over pricing anyway. But it’s amazing how long such vendors can sometimes take to adjust to market reality.

The other off-market over-pricing I’ve encountered comes from private vendors who are unaccountably keen to avoid estate agent fees by approaching me direct. I always invite them to send me details “just in case”. I’ve yet to have a client brief match what such private sellers have been offering. No doubt that’s only a matter of time. The asking prices usually look pretty toppy. Dealing with a vendor who has no estate agent is hard enough. Dealing with someone who expects top dollar but begrudges a 1.5% commission to get it? Best avoided unless the property is truly exceptional!

Off market properties have a certain fairytale quality. They may well be homes where your dreams come true – but before those dreams become reality you need to tell the difference between the prince and the frogs