What is off market property, and is it a good idea?

Everyone’s looking for an angle into the ridiculously competitive property market. But for those hoping to avoid the emotional stress and risk of auctions, conducting ‘secret’ deals behind closed doors could be the way to go. In other words: buy off-market.

This isn’t nearly as shady (or cutthroat) as it sounds. Though not as common as the traditional auction route, buying off-market is standard practice. This method also suits specific kinds of buyers/sellers, and could present a potentially clever, time-saving way around all the hassle. 

But what is off market property? Why doesn’t everyone buy this way? And how do you know if it’s right for you?

Buying property off market simply means purchasing a home that wasn’t advertised publicly for sale. 

Instead of trawling real estate portals, attending open houses, and vying to be the highest bidder at auction, prospective buyers go directly through an agent who privately matches them with an ideal property. Sounds amazing – right? 

Usually. Buying off market still requires research and is all about ‘who you know’, favouring buyers willing to work closely with real estate agents and move quickly on opportunities. Buyers might also have to pay a (sometimes hefty) premium to secure the property. 

However, if you’re willing to play the game, the benefits can be enormous – for both buyers and sellers. Buyers can enjoy a streamlined, non-competitive process with a wider and exclusive selection of choices at potentially cheaper prices, while sellers can keep their privacy and sell quickly. They might not get as good a price as they would at an auction, but time might be worth more to them. 

Sometimes you’re just a buyer standing in front of a seller, asking for the best price.

Heck yes, exclusive property and secret deals sound great – why doesn’t everyone just buy property off-market?

Again, premiums. This can lock out a lot of prospective buyers and is often why off market property deals are the preferred method of celebrities or high-income earners.

There aren’t as many homes available off the market, either, and it can be risky for first-time buyers who don’t know the real estate market well. Can you unemotionally assess the value of a property at first glance? Do you have the capital (or home loan pre-approval) to make a compelling offer? These are critical questions to ask.

Buying off market also requires you to get ruthlessly clear about what you want and how much you’re willing to pay for it. Firm negotiating skills – or a good buyer’s agent – are absolute must-haves. 

But all of these are doable with the right time, effort, and resources, so consider your situation and what makes sense for you.

So you’ve done a little soul-searching and decided: “Bring it on. Let's buy off market."

Brilliant! Aside from the usual home-buyers checklist, you’ll need to have a finger on pulse. Join a database or off-market subscription list and introduce yourself to some red-hot real estate agents (plural!). This way, you’re ready to pounce when that amazing property goes up for a sneaky, secret sale.

Buyers’ agents can help enormously in this regard, too, since they can do the digging and negotiating for you. 

Some things to decide in advance (and tell your agent) include:

• Price range.
• Ideal suburb/area (the more specific, the better!)
• Property-type (house, apartment, magic castle, etc.)
• Bedrooms/layout.
• Proximity to amenities (transportation, schools, shops, etc.). This point in particular is important for gauging capital growth potential.
• Any special features you can’t live without.

This “must-have” list is separate from a “would be nice” list, however. Maybe it’d be great to have a pool for the kiddies, but it’s not a dealbreaker.

However, keep your wish list in mind when browsing properties. That lovely coastal villa doesn’t have a pool right now, but it definitely has room for one later.

Looking to buy a home? We’ve assembled a guide for first-time buyers. Compare home loans in the table below.