“Off market” properties – What are they?
Why would anyone sell this way?
Are they really around and why should you consider buying one?
The team at Metropole Melbourne come across two types of what I would call “off market” transactions.
Most are really “pre market” opportunities. We get the opportunity to inspect and make an offer on a property before it hits the Internet.
And then there are the true “off market” opportunities where for various reasons the vendor doesn’t want to make the sale of their property public knowledge.
And yes they do occur!
I personally bought a property off market two weeks ago (no one else knew about it) and currently, despite the hot market conditions, a significant portion of the properties we buy for clients at Metropole are bought this way.
So let’s look into this in a little bit more detail…
Why do pre-market opportunities occur?
It works a bit this way…
A selling agent lists a new property and then there’s about two weeks before it hits the Internet. During this time photographs are taken, floor plans are drawn, the seller must approve the marketing and all this must be loaded on the Internet.
If you think about it…most selling agents would prefer to keep their whole selling commission rather than sharing it with other agents in the office.
So what do they do?
Well…they don’t tell the others in their office about it for a few days and instead they ring their “A grade” clients and offer them this great new property they have just listed for sale. And then they call their “B” clients and then they ring anyone else they think may be interested.
A few days later I have to tell the other selling agents in their office about the property and these agents do the same – they call their top clients.
And if it doesn’t sell, eventually the property gets listed on the Internet and you find out about it.
How do you get on the speed dial of these estate agents?
This is tough when you are a “normal” property investor or home buyer.
You’re probably only going to deal with selling agents a few times in your life on the other hand the team at Metropole was involved in close to one quarter of billion dollars worth of property transactions last financial year alone.
Do you think this puts us on the speed dial of most selling agents in the areas where we are active in Melbourne, Sydney and Brisbane?
So while it may be difficult for you to get the call, you can still benefit from this special treatment by having the team at Metropole on your side.
By the way that’s the easy bit! If you’re interested in starting or growing your existing property portfolio just click here and organize a free strategy session with Metropole
Let’s look at some case studies…
I mentioned that I recently bought a property off the market.
Pam and I were looking for another development site to build a residential townhouse project to keep as a long-term investment.
Local selling agents in the suburbs were the team at Metropole are actively looking for properties know that we are always in the market for our clients and one rang me telling me of a property he had just listed that was a deceased estate.
The sellers were two elderly gentlemen who lived in different parts of regional Australia (brothers of the deceased owner) and had inherited this substantial property that would have given them a considerable windfall.
Interestingly despite their seven-figure inheritance, they weren’t keen to spend the required $15 – $20,000 on marketing costs and were bit nervous about taking the property to auction.
Instead, they were happy with the certainty of an unconditional sale.
We were the only buyer notified about this opportunity, made an unconditional offer within 48 hours and voilà… Pam and I own another great development site.
The sellers are happy, the agent got a quick sale (and didn’t have to share his commission with anyone else in the office) and we got a great deal. In fact I would call it a bargain.
Here’s another case study:
This week we were notified by a selling agent that he had just listed a great property for sale in a prime spot with water views in the Melbourne suburb of St Kilda.
This well looked after, fabulously positioned first floor two-bedroom apartment would suit a large range of owner-occupiers or investors yet we were offered first opportunity to look at it, and the seller didn’t want an active marketing campaign.
Why would this be so?
Interestingly the vendor was a well-known television personality who leads a very private life and didn’t want the world to see his apartment.
I can understand that.
The selling agent rang us to see if we had a client who would be interested in this property and we certainly did.
Now Nicole (one of our property investor clients) has purchased a fantastic investment off market, without competition at auction and at a very fair price.
We get these opportunities all the time at our offices in Melbourne.
A common reason we are offered off market opportunities is that there are tenants in place who make it difficult for potential buyers to inspect the property or maybe don’t keep the property in a presentable condition.
However as buyers’ agents we can see the potential opportunity through the clutter.
Now don’t get me wrong…
Most pre-market and off market opportunities aren’t great deals.
You see…many agents list the properties they have for sale by “buying the listing”.
In other words they entice the seller with an inflated price to get the listing and then slowly condition them to the real market price.
This means that many of these opportunities we’re offered are not suitable for us, but that’s okay. That’s the way the property market works.
Here’s my recommendation to you…
If you’re in the market for an investment property please give the team at Metropole a call on 1300 20 30 30 or click here now and organise an obligation free strategy session.
Whether you are a beginner or a seasoned property investor, we would love to help you formulate an investment strategy or do a review of your existing portfolio, and then help you acquire your investment property.
When you attend our offices you will receive a free copy of my latest 2 x DVD program Building Wealth through Property Investment valued at $49.