Selling off market. Yeah or Nah?

Ever wondered if selling off-market was a good option? Why do people do it? What do you need to look out for if you are considering giving it a go yourself?

A few reasons sellers give for considering an 'off-market' sale.

• "Getting the property ready for sale is too hard/we're too busy.."
• "We don't want (insert nosy neighbour, intrusive relative or ex-friend) to know we are selling.."
• "I don't want to spend the extra $$ on (adequate) marketing.."
• "The thought of heaps of strangers coming through our home stresses me out.."
• "An agent approached me. Might as well see what we're offered.."

Most of the time reasons are in the areas of:

1. Convenience
2. Cost Saving
3. Privacy

Underselling: The risk of selling off-market.

Very easy to do when you are making a selling decision based on one (or a few) buyer(s) opinion of value.

This risk is higher in a market that is rising as price changes take time to show clearly in the statistics.

Sellers may want to take note at the moment (July 2023) given market trajectory appears to be turning. Inadvertently selling too cheaply can easily convert your intended property step up into more of a side step. 

Mitigating the risk. Pause before you act...

You can't eliminate the risk of underselling but you can mitigate it by ensuring that your understanding of value is as complete and current as possible. 

If you have been approached by an agent, you should receive a written appraisal of your property before you sign an agency agreement and any buyers are brought through and you should also be advised by the agent of the risks of underselling. 

(If this does not happen - red flag)

It’s also a good idea to ask your agent to advise of any new sales or property developments that may be relevant to you immediately before signing off on an offer.

Why we (agents) can’t do this…

Most agents will have approached a seller or two who is keen to see offers but says “I’m not signing anything now but bring buyers through and when you have a decent offer I’ll sign your form.”

Guys, we can’t do this.  

Legally, we have to have written authority to sell your property before we offer it to buyers and certainly before we bring them through your property or present you with an offer. It doesn't have to be a long agency agreement - a day or two, a week - but the agent must have written authority to act on your behalf.

The agent is also legally obliged to provide you with a written appraisal before you sign an agency authority. This is to ensure that you are aware of values and the marketing strategies available to get the best outcome. Even if you are crystal clear on your preferred option being to sell off-market - your choice has to be an informed one for the agent to proceed. 

Professional standards and advice you can rely on go hand in hand.

Buyers agents…

If the agent is not asking you to sign an agency agreement or pay a commission there may be a buyers agency in place (so the buyer pays the agent) and that is a different story. Ask who will be paying the agents fee should your house sell. If you are dealing with a 'buyers agent', you should be getting advice on value from an alternative source – like a registered valuation, or a couple other agents appraisals – not the agent that has approached you on behalf of a particular buyer. Conflict of interest and all that. 

Sometimes an off-market offer can be above market…

A couple of examples are when a property solves a particular problem for a buyer especially well. As in, it totally fits the bill. Or when a buyer is weary of competing with the open market and happily pays a premium not to have to do so again.

There are valid reasons for wanting to sell ‘off-market’ and I hope this article has given you some food for thought if you are considering doing so.

My final advice is…

When in doubt about whether or not you're selling yourself short - get a second opinion. 

Happy (& safe) selling!

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