Homeowners who choose not to list their properties for sale and instead rely only on the buyer databases of agents risk underselling their properties, the head of a major real estate group claims.
The real estate industry is bracing for a lift in “off market” sales due to uncertainty over the economic impact of coronavirus, but Starr Partners chief executive Douglas Driscoll said it was a risky move.
Off market sales usually imply the agents offer the property exclusively to their personal contacts. The danger was this was not a wide enough audience in the current market, Mr Driscoll said.
Avoiding tried-and-tested methods of marketing a home could result in a sale that is below the true market value, he added.
“The moment an agent promotes a property for sale – even through a closed network – the property is very much on market. A more appropriate term would be ‘marketed quietly’,” Mr Driscoll said.
“As of late, we’ve seen the practice extend to outer suburbs and moderately priced properties, which for me is a concern.”
Mr Driscoll said a lack of competition would diminish the price potential of the property and those who opted for off market sales risked underselling by about 5 per cent.
“I strongly believe property sellers are increasingly opting for ‘off-market’ sales because they believe – and some agents are encouraging them – that it’s the easiest, most hassle-free way to sell their home,” Mr Driscoll said.
“My advice to any homeowner looking to sell their property is try to get their property in front of as many eyeballs as possible. I don’t doubt for a second that some of those people that are selling ‘off-market’ are achieving a great price, but are they getting the best price?
“Why sell your home in isolation when you can sell it in competition?”
Mr Driscoll said sellers should view reaching out to a broader audience as “an investment – not a cost”.
Property commentator Anna Porter said some buyers were under the false impression off market offerings were being made exclusively to them but this was rarely the case. “It certainly does not guarantee the buyer a special deal,” she said.