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Off market is the new black.

Friday 21st Jun 2019

Off market is the new black.

Despite the rain the Mini-mos Marathon and Mosman Public School fair on Sunday was a huge success. Thank you to everyone that came along, especially all of the volunteers who contributed so much.
 
Back to my day job…this week we have made three sales. In addition, today we helped clients secure a stunning premium home in Mosman off-market.
 
Spot the segue…in this newsletter I am going to look at why buyers and sellers sometimes favour transacting off-market (and the benefit of being nice to agents).
 
A complaint amongst buyers (and lazy agents) today is that ‘there is just no stock’. Last week I highlighted that publicly listed homes are now at 20 year lows however there are many transactions occurring across the lower north shore in relative secrecy.
 
Perhaps the biggest challenge with off-market transactions is that there is a key ingredient for both sides missing, and that is contextual interest. One way to look at it is that for properties to sell, doubt needs to be addressed. By that I mean that most sellers will compare offers with feedback, and feel comfortable that they are accepting the right price. Equally, buyers like to know where the relative interest is with other parties so they don’t feel like they are paying overs. On that basis, I would say that most successful off-market transactions occur when buyers are prepared to pay at market or slightly over, and sellers wish to avoid the barriers of entry to the open market.
 
Given that over the last 100 years real estate prices have trended upwards, I think that buyers who are motivated more by buying the right property than trying to find a good deal are just plain smart. With regards to sellers, sure…maybe you might get a bit more by publicly listing but by the time you add up the cost of preparing a home for sale, the absurd advertising costs, and overall intrusion into your private life with open homes, it’s no wonder why this style of sale is gaining appeal.
 
How do we gain access to these off market opportunities I hear you say? A good start is to develop good relationships with the most active selling agents in the area. Every week I make dozens (sometimes hundreds) of follow up calls and when frustrated buyers are rude and dismissive I actually feel bad for them. I often hear ‘stop calling me, we will just watch what comes up on the internet’ or frustratingly, some people come to open houses and refuse to call back with any feedback. Here is a tip for people out looking: it’s ok to say you aren’t interested. Better still, if you call back and say you aren’t then we may just tell you about something else. Seriously, there is someone on our database that has been through over 20 properties with us and never calls back…last time I was so concerned for their welfare I nearly reported them missing to the police! #notfrustratingatall
 
As a client recently said to me, ‘you get more bees with honey’.

Until next week,
David Murphy