When your local property market gets a little too competitive and crowded, you can always choose to buy propery off the market. The pace and process may differ, but you have better chances of finding a good deal. Who knows, you might even secure a property at half the usual listing price. However, it is incorrect to think that homes sold off-market property will always be affordable.
The truth is that buying off the market should not be a ploy to save money and resources. This route is often the best route for serious buyers who cannot be bothered with competitive property purchasing settings and bidding at auctions. Off-market transactions also provide more room for negotiating terms and conditions. Anyone in the real estate market can initiate this process.
Why Buy Property Off the Market?
Besides the traditional route, which is usually conducted through listings, auction biddings and going neck on neck with other homebuyers, there are other ways to buy property. In traditional homebuying settings, sellers have more advantage. They often receive several offers at the same time, and buyers can only hope that their offer wins the seller’s favour. That is why we often wonder about our financial capacities and how much we need to spend to secure our dream home. When your offer does not make the cut, you have to start from scratch and bid for another listed property (probably the second best home on your shortlist).
What makes buying property off the market appealing is that there is less pressure for buyers. There is no heavy competition and, such as in the case of auctions, they need not bid more than they can afford just to secure a property. Off-market property transactions eliminates pressure-driven home buying problems. Buyers are introduced to a non-traditional way of purchasing a home, which may work better for them in the long run.
Reasons an Owner or Agent Might Sell Off the Market
Various off-market transactions have different origins. Some owners want to conduct their affairs in private and do not wish to let other people know of their plan. They may experiment with the market to weigh their options, approaching agents and brokers or posting at online real estate forums for feedback and advice. For most of these sellers, privacy is far more important than selling the house for a lower market price than usual.
Owners’ Price Expectations
Off-market deals can be a double-edged sword. Market volatility has a great impact on final sale prices, and in the event of an upswing, you could either be paying for the market value or an amount exceeding that. That is why several property owners set their own expectations before commencing any off-market transaction. Some may charge higher for the exclusivity involved in the transaction, where you need not to approach every agent or broker and scour a city or province for the right property. And if you have the capacity to pay for the market price, it is basically a win-win situation.
Advantages When You Buy Property Off-Market
1) Less Competition
One of the best advantages of buying off the market is less competition. Unlike the usual property purchasing process, seller does not host site viewings or entertain several buyers at once. The property may not even be advertised online. There is no goal to list the home and sell for a higher price after it draws interest. Homebuyers can buy property without pressure in an off-market arrangement. They do not have to worry of losing the opportunity to purchase a home because seller is getting better offers.
2) More Time to Choose
Taking your time and buying property at your own pace is unlikely in a traditional property purchasing route. At auctions, for instance, you need to keep up with others to win the bidding war and time is hardly on your side. Decisions must be quick and you have to be clear about your own bidding budget. It would be difficult to backtrack once you make a decision. Winning a property means you are obligated to pay it right away based on the offer you made.
The same type of pressure can be detrimental to homebuyers looking to buy property the traditional way. Some sellers are in a hurry and if you are caught up in their pace, they pressure you to make an offer before you are ready. They will hint at a competition who made a decent offer and is about to make a down payment. But this is not the case when you buy off the market. Competitors are few and far between so rushing to buy property should be the least of your concern. With the help of a seasoned buyers agent, you have enough time to conduct due diligence on an off-market property and assess whether it meets your standards.
3) Negotiate Better Terms
Another crucial benefit of buying an off-market property is the opportunity to build more rapport and interact with the seller. Through these interactions, you have plenty of room for negotiating favourable terms and conditions. You also gain a better understanding of seller’s motivations or reason for selling their property, consequently giving you a better idea of how much to offer. Since sellers are not bombarded with too many offers from buyers, they can sort out the few ones submitted and examine them closely.
Both sellers and buyers tend to communicate better in an off-market setting. There is more opportunity to listen to both sides of the story and agree on terms and conditions that mutually benefit both buyer and seller. Environment for negotiating conditions and clauses is more conducive, at a pace both parties are comfortable with.
Cons Homebuyers will Likely Face
Despite the advantage sellers seem to have, as long as you play your cards right, buying off the market will work just fine. Besides the exclusivity and lack of competition, you have enough time to conduct due diligence. Review the property’s ownership history, age, legal information, components (materials used), current status, existing financial obligations (if any), and possible maintenance and repair costs post-purchase. But you have to do this quickly and look for professional guidance in case the owner changes their mind and imposes a deadline instead. Should they tell you to make your decision within 2 weeks or a month, you should have been able to gather all the necessary facts by then.
On the brighter side, off-market transactions have more room for negotiation and flexible arrangements. Depending on your relationship with the owner or agent, you can request for more leeway and extend the deadline. A friendlier air surrounds off-market property purchases. You can make use of diplomacy, negotiation and clear communication skills while not strictly bound to the process. This situation is hardly ever possible if you buy property via public listings, auctions and other traditional property purchasing methods.
A Word to Novice Off-Market Homebuyers
If you are serious about buying off the market, prepare yourself for any eventuality. Focus on nurturing good relationships, learn more about the property market and set your expectations straight. Buying a residential or investment property in Canberra is an arduous process that requires long-term commitment. Feeling like everything is such an ordeal? The good news is you need not go through it alone. There are several experts in the vicinity who can assist you from start to finish without charging a fortune.
