One of the reasons vendors have historically chosen to sell their homes off-market is to retain their sense of privacy. This could be the result of a divorce or they may have fallen on hard times financially. In turn, this creates the perception amongst home buyers that they are able to snap up a bargain. Think again.
The Financial Times1 reports that research from the leading estate agent, Hamptons International, found that 31% of off-market sellers achieved over the asking price – compared to the overall average of 25%.
In the first quarter of 2021 a total of 37,070 homes were sold off-market in the UK, the largest number in any period since 2007. This is a substantial increase on the 20,830 sales in the corresponding period in 2019.
London is the key market where 20% of all sales in the first quarter were off-market, nearly double the 11% recorded two years earlier. A further 12% of sales in the national capital were launched off-market before being listed through more conventional means.
Through the boom property market of 2020/21 going off-market provides sellers with the opportunity to ‘test the waters’ with a price deliberately pitched above market value, secure in the knowledge that if the property fails to sell, they can list it on the open market for a lower price.
Through the course of several pandemic induced lockdowns, some home sellers would have gone down the off-market path to limit the number of people inspecting their property.
The underlying message for buyers is clear. Looking at properties off-market provides the opportunity to turn up interesting options not available on the open market but don’t necessarily expect a bargain.
Understanding the home seller’s motivation is a key strategy employed by London’s House Detective during the negotiation phase. This is crucial to avoid paying above market value and experiencing buyer’s remorse.1. Financial Times, 8 May 2021: Boom in off-market property sales
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