Buying property comes with a range of different pitfalls. Sometimes, buying off-market property helps you to avoid those pitfalls. This article covers some of the benefits of buying off-market property.
Think about all of the hassle that you have to deal with whenever you buy a property.If you go the traditional route, you have to search out suitable properties. This involves research and speaking to a bunch of seller’s agents. But that’s not the end of it. Every other buyer does the same thing, which means you have to figure out how to beat them to the property.Auctions are even more stressful. You still face a high level of competition. But now you face it directly. Bidding wars can escalate to the point where you end up paying much more than you intended for a property.Competition isn’t the only issue either. Buying property via auction or in the traditional manner isn’t something you can do privately.If only there were a way for you to acquire property without having to deal with all of these issues.That’s where off-market property comes in. This article teaches you what off-market property is. It also answers the question of “how do I get access to off-market property?” Finally, it presents you with a few of the benefits of going this route.
What is Off-Market Property?
Off-market property is a blanket term. It applies to any property that a vendor sells without advertising the property publicly. Strangely, it’s most often used for properties that require a quick sale. In these cases, making the sale is often more important that reaching a specific asking price.This makes selling off-market disadvantageous to the majority of buyers. It doesn’t lead to them attracting the maximum amount of money for their properties. As a result, most use one of the traditional methods, such as auctions.But the tactic appeals to a certain niche of sellers that need to sell a property quickly. For example, those going through a divorce may use an off-market sale. They benefit from a quick influx of cash, plus the sale stays out of the public eye. This means they experience less pressure during an already difficult period of their lives. There are other reasons why a seller might choose to go off-market. They may have difficult neighbours or have issues with people nearby. Selling off-market allows them to get rid of their properties and move on, without publicising the sale. This means they achieve the sale without any added difficulty from their neighbours.Those in high-profile positions, such as celebrities, also often sell off-market property. In their cases, the privacy that comes with the sale is the biggest advantage. After all, the tabloids could make any story out of a high-profile person choosing to sell. Imagine wanting to sell your home, only to see a bunch of “news” reports speculating on whatever “difficulties” have led to the decision.If a seller wants to stay out of the public eye, an off-market property sale is the way to achieve it.Of course, this lack of advertising leads to one question – how do I get access to off-market property?
Generally speaking, you’ll still work with estate agents to locate off-market properties. But the way you go about it changes.With a traditional property purchase, you find a listing that appeals and talk to the estate agent. They arrange a viewing and you go from there.But that agent isn’t going to tell you about any off-market deals. Those selling off-market generally look for specific types of buyers. If you don’t fit the profile, or if the agent doesn’t know about your profile, you don’t get access.In the end, it all comes down to relationships. Talk to everybody that has any involvement with the industry. Start with seller’s agents. Let them know who you are, what you’re looking for, and the sort of financial clout that you’re packing. After that, get in touch with lenders, valuers, and buyer’s agents. Anybody who has involvement in the industry can help you to build your profile. Buyer’s agents prove particularly important. They can often sell your buying capabilities to seller’s agents. This then means that your name comes up in the conversation when that seller’s agent gains access to a relevant off-market property.Make your intentions clear and maintain the relationships that you create. Once those in the industry know who you are, you’re better-placed for buying off-market property.
The Benefits of Buying Off-Market Property
You’re probably thinking that this all sounds like a lot of hassle. And you’d be right. It’s generally a lot easier to just check property listings and auctions to find properties.But that means that you miss out on the benefits of buying off-market property. Here are four that may change your mind about the way that you buy.
Benefit #1 – Less Competition
As mentioned at the top of the article, you face a lot of competition when you buy in the traditional fashion. Every other buyer with the same needs as you will get in on the action. Sellers use this to their advantage. They stretch things out and play buyers against each other. You’ll spend hours in negotiations without any clear idea of whether you’re near the top or the bottom of the list.All of that competition disappears when you buy off-market. If nobody else knows about the opportunity, nobody can stand in the way of you grasping it.This generally means that you can achieve a lower price for a property compared to what you’d buy it for on the open market. The lack of competition means that you don’t get drawn into a bidding war. Better yet, you’re in an advantageous position if the seller wants to sell quickly. Several factors come out in the buyer’s favour when you buy off-market. This usually means that you spend less money.Investors often find that buying off-market is the best way for them to secure bargains. Plus, they can build their portfolios without worrying about other investors in the area. However, residential buyers also benefit from the lack of competition.
Benefit #2 – There’s No Spotlight
The lack of a spotlight on the sale benefits buyers just as much as sellers. If you’re in a high-profile position, you may not want too many people to get involved with a property purchase. Buying off-market property allows you to maintain control over the transaction.For high-profile people, this usually means that they can keep newspapers and reporters away from the purchase. For example, a celebrity may have split up with somebody and needs to move home. Buying off-market means they don’t tip anybody off. They can contain the split until they’re ready to go public with it. But they can still move forward with their lives.Buying off-market also means that you don’t reveal your financial situation. If nobody knows about the purchase, they also don’t know how much you’re paying. Some may find this useful when dealing with personal situations that involve money.
Benefit #3 – The Time Benefits
As mentioned, sellers don’t field a whole lot of bidders when selling off-market. Generally, they’ll deal with two or three at most. More often, you’ll be the only person who has placed a bid on the property.This lack of competition doesn’t just mean you get a better price. It also means that you have more time. You don’t have to arrange viewings based on when other buyers want to view the property. Moreover, you develop a more personal relationship with the seller. This means you get more time to negotiate and to examine the property before making your final decision. Of course, this benefit isn’t as relevant when you’re buying from a distressed seller. They want to get the transaction over with as quickly as possible. But you can even use that to your advantage. If the seller doesn’t want you to spend time on your research, you can leverage this to achieve an even better price.
Benefit #4 – A Smoother Transaction
When sellers only work with one buyer, they dedicate more of their time to that buyer. This makes the entire transaction much smoother. You won’t have to worry about sellers hosting open houses or their agents being unavailable. In many cases, you’ll deal directly with the seller throughout the process.This benefit comes to the fore during negotiations. It’s in the seller’s best interests to offer something that appeals to you. As a result, they’re unlikely to place as many conditions on the sale as they may in other circumstances.This often works both ways. Those who want quick sales aren’t going to want to deal with lots of conditions on your offer. This means they’ll often ask for simple offers that can get processed quickly. Assuming you can provide this simpler offer, you get to enjoy a faster transaction.The end result is that the deal gets done faster. You don’t have to fit negotiations around other buyers. This means that you can resolve issues quickly and move forward with the purchase.
The Final Word
Buying off-market property comes with an array of benefits that you don’t enjoy when you buy on the open market. You’ll benefit from less competition and will often deal with vendors who want to sell quickly. Moreover, you’ll have more personal contact with the seller. This often proves advantageous during negotiations.Of course, there are some disadvantages to the process too. Some sellers use going off-market as a way to gauge the market. There’s nothing quite as disappointing as having a bargain pulled out from under your nose by someone who never intended to sell.However, for the most part, buying off-market is often your pathway to securing a bargain. But you need to build up some contacts in the industry before you can enjoy these benefits. Get in touch with the buyer’s agents at Cohen Handler today. We can put you in touch with the people who give you access to off-market properties.