5 Key tips to buying an 'off-market' property
In the current Covid-19 market, there has been an increase of ‘off-market’ listings and for any buyer there are some key steps every buyer should know when purchasing a property off-market.
‘Off-market’ listings or ‘quiet’ listings are those properties that are not publicly advertised but are genuinely for sale. Some vendors choose this method for a number of reasons:
- They don’t like the auction process
- They don’t want their neighbours to know they are selling
- They are not pressured in a timeframe and keen to seeking market’s interest & only if a buyer offers the right price then they’ll sell
- They don’t want to spend on expensive public advertising campaigns with the uncertainty of whether it will sell or not.
There are a number of steps you should consider to be successful when purchasing a property that is being offered ‘off-market’ but firstly, let’s look at where you can find off-market properties for sale in your local area.
Getting access to these properties in the past required buyers to either hire an expensive buyers agent (charge a fee c2% of property sales price) or contact all the real estate agents in their local area. This requires building a relationship with real estate agents, letting them know you are looking to buy a property and the requirements you want to be matched with and ask them to put you on their agent database to be alerted when a suitable property comes up.
Even doing all this does not guarantee a new buyer will be notified as agents will generally prioritise their longstanding buyer customers.
This approach is time-consuming and many buyers are missing out on finding a property to buy.
Today there are new platforms created such as Property Whispers giving buyers access to off-market properties for sale and matches are delivered straight to your inbox.
So once you’ve been notified of an off-market property available in your area and you’ve spoken to the real estate agent about, there a number of key steps you need to take prior to making an offer to purchase.
- Write down a list of ‘must-haves’ & ‘wish list’. Your ‘must-haves’ list is your non-negotiable list - price, features and attributes you won’t compromise on. An example of features & attributes you might not compromise on could be the lounge area must be very light or there must be abundant storage cupboards or room to add storage, and the kitchen and bathroom must be newly renovated. Or it may be that you only want a quiet street with little traffic.
Your ‘wish list’ you are more flexible with. Whilst the features & attributes on this list are things you’d like to have, if they were not available you could do without or be open to make changes to the property, if you love something else about the property more. For example you love the renovation of the property, it ticks all the boxes in space, light, finishes but it doesn’t have a swimming pool which you’d like. You’d be happy to forgo this as it has the space for one which you could build later on. - Arrange a private appointment to view the property. In many cases the property will not have been styled by a professional stylist so if you don’t like their furniture don’t be put off by that, just try and visualise your own furniture in the space you are looking at.
If you like the property & would like to view it again at a different time or need to show your partner or family members ask the real estate agent to arrange another private inspection. It is important to show the agent that you are interested without committing to anything yet. The agent always refers back to their vendor after every inspection so you want to show some interest.
If the property ticks all the boxes then you need to do your due diligence to ensure that there are no hidden surprises. You need to ask the real estate agent for the following:
- A copy of the Contract For Sale which you will need a qualified conveyancer or lawyer to review & advise you of any issues.
- Permission to arrange a building & pest inspector to provide you with a building & pest report can be also be done now or at a later date prior to signing a contract.
The real estate agent will most probably ask your opinion on price. Don’t feel pressured to offer any price until you are ready. However be sure that you are comfortable with the price range that the agent is telling you. In an off-market scenario where there is little competition you can be in a good position to own the property if you are comfortable in that price range.
Once your legal advisor has reviewed the contract & there are no issues you are in a position to make an offer on the property.
an offer includes three things:
- Price you are willing to pay for the property,
- Deposit amount (usually 10% of the purchase price)
- Settlement terms (the date you are willing to pay for the balance of the property).
Your offer is then taken to the vendor for their consideration. There may be some negotiation required to get to a mutually agreeable price. If you are not comfortable with the negotiation process then it’s best to find someone who can assist you with this process.
Once your offer is accepted you will then be required to sign the contract and attach the deposit cheque. The vendor will then sign their copy of the contract & contracts are then exchanged. Congratulations, you’ve now purchased the property.
Article written by: https://propertywhispers.com.au/
