In some markets for privacy or security reasons some of the most exclusive properties are sold by private transactions, in other words without being advertised on the internet or other media. Our tips can help you get started if you are looking to buy an off-market property.
Photo Credit: QQ7/ Shutterstock
1. Do not limit your search to off-market properties – By definition off-market properties are not advertised publicly, therefore finding them is not always easy, leaving you with few reference points. Therefore even if you are interested in these properties, it always makes sense to consider the whole market, to increase your choices and gather information on the trading prices of similar luxury properties located in the area that interests you.
2. Be proactive – While some owners may be actively looking to sell and simply prefer not to publicise their property online, choosing instead to go off-market, other owners may not be ready to sell just yet but would do so if they received the right offer. Certainly if you are not proactive in finding properties and approaching the vendors you risk of waiting forever. There are various things that you can do to increase the probability of finding the right off-market property as follows:
- Place adverts in suitable publications describing the type of property you require. Shortly Te Atrium will launch a platform for off-market transactions where you can publish your search criteria and find suitable sellers; register on our website to know more.
- Walk the streets to identify potential properties and write an open letter to the owners. Alternatively if you are looking to buy an apartment in a serviced building, visit the building and speak to their concierge; it may be a great source of information.
- Inform your family and friends who live in the area where you are looking to buy; they might know someone who is looking to sell off-market.
- Last but not least consider hiring a buying agent who is a local property expert, has a great network of potential sellers and with whom you can build a good rapport (see below).
3. Use a buying agent – In many European top markets, especially the ones where international buyers are rife, buying agents are becoming increasing popular, as discussed in our recent “Rise of buying agents in London” blog post.
A good buying agent will have access to the best off-market properties, provide you with impartial advice, help you formulate the right offer as well as save you considerable time and effort along the way. They may also add credibility and strength to your bid. There are many buying agents, however not all of them being highly qualified. If you need assistance with selecting an independent Buying Agent, Te Atrium is happy to put you in touch with the best professionals in all the market where the portal is active, at no cost to you.
4. Be focused – It is essential that even before starting your property search you are clear on what type of properties you are looking for distinguishing between the essential requirements and the nice to have ones. If you visit more properties you may later want to rank them against your criteria. Do not forget to research in advance the area where you are planning to buy because while you can later make changes to your property, you won’t be able to change the area. After all the location continues to be the most important attribute of a luxury property.
5. Check that the property is, in fact, off the market – Especially if you do not use a buying agent who can check things on your behalf you may want to double check that the property is truly off-market. Search online and ask local agents to see if the property has recently or ever been on the market. Perhaps it has been taken off-market, in which case you would do well to find out why and how many other people have heard about the property as a result.
6. Don’t always expect to save money – Each off-market transaction is different so it is really difficult to generalize. However, everything else being equal (in other words considering only the effect of selling off-market versus selling publicly the same property), there are factors that can push the full amount paid by the buyer in both directions.
On one side the Seller of an off-market property may be able to reach a lower number of potential buyers and therefore as a buyer you may have to face less competition and possibly offer a lower bid. On the other side, when the seller is not actively looking to sell as well as when the real estate market is hot or very liquid, the buyer may have to offer above market value to make sure that the seller accepts the offer.
Going off-market the buyer may be saving money on selling agent fees (if they are applicable – in London for instance this does not apply as selling agents’ fees are paid by the seller). On the other side the buyer may have to factor in buying agent fees (if applicable); however buying agents are usually good negotiator and may be able to achieve a discount on the asking price so that their service more than pay for itself.
Nonetheless it is always good to remember that other (independent) factors may influence the purchase price of the property even more such as:
- The market conditions;
- The eagerness and market knowledge of the buyer;
- The financial condition and needs of the seller.
Photo Credit: Maida Vale - Flickr -Harshil.Shah
7. Don’t be afraid to negotiate – At the beginning of every negotiation you need to decide the maximum price that you are willing to offer for that specific property. So in case you are caught in an auction with rising prices you will know when to stop and you won’t regret overpaying to acquire the property. Never offer your maximum price right upfront; on the contrary try to keep your first offer as low as possible. If your first offer is not accepted it is not a bad sign; from that point continue the negotiation and increase your bid in lowering increments (if needed). Whatever you decide to offer, benchmark it against with what is happening in the local market for similar properties; if you are not sure seek help or let us know; our Property Scouting Team can put you in touch with the most qualified experts in the property market.
8. Be patient and prepared – Buying off-market may take longer, especially if you have limited time or if do not receive enough support during your search. However once the right opportunity comes around you need to act quickly. By moving fast there is a lower risk of possible disruptions to occur, for example, another buyer making a higher offer or a vendor changing his or her mind; make sure that you have everything in place financially and legally to complete the transaction as soon as possible. On Te Atrium website you can find up to date property guides and on our blog you can always find up to date information on the luxury real estate market.
Do you have experience of private property deals? What other tips would you offer? Let us know in the comments section below.
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