- In the summer market lull, focus on off-market properties for opportunities.
- Buying off-market allows one to access properties in fast moving markets, but finding these deals is not so simple.
- Homes.com.au's 'Spaces' feature uses AI to connect buyers with both on- and off-market properties.
Australia’s residential real estate market typically heats up in the middle of spring before dying down in November and the subsequent summer holidays.
It is during this summer slump that Homes.com.au CEO, Andre Costa, says buyers and sellers should switch gears and focus on off-market properties.
“At a certain point in December, new listings dry up because vendors want to maximise their marketing spend in the new year. Right now, what this means for buyers is that they should switch focus to off-market properties,” he says.
What are off-market properties?
Off-market properties are properties that are for sale but not publicly listed or marketed for sale online.
There are several reasons why a seller would prefer to sell a property off-market. The seller might want more privacy regarding a sale.
For example, the home may be a distressed sale, or be driven by divorce, or even death.
Or, they might want to make the sale swiftly, avoiding the cost of marketing properties and the hassle of hosting frequent open homes.
Many pricey properties are only available off-market as a sales strategy. High-value properties usually take longer to sell, and a property on the market for a long time may draw suspicion that the home might be a lemon. By being off-market, buyers cannot tell how long the property has been for sale.
Sellers may also offer off-market properties to gauge the value of a unique property or one in a fast-evolving market. In doing so, they can use a closed pool of buyers to gauge the property’s price range and use the off-market offers as a price guide if they decide to sell on-market.
Finally, the home might be a lemon, having structural, cosmetic or geographical issues. Selling them off-market may generate interest and fool rookie buyers into overpaying for the property.
It is important to note that buying a property off-market does not necessarily mean you are getting a good deal. Sellers are unlikely to sell properties for what they are worth on the open market.
Instead, the main benefit of buying off-market is less competition, generally free from bidding wars. Additionally, it allows individuals to purchase homes in fast-moving markets before they hit the open market.
However, accessing off-market properties generally requires the services of an experienced buyer’s agent. Buyer’s agents who have good relationships with local real estate agents will be keyed in on off-market deals.
Real estate agents are more likely to offer off-market properties to buyer’s agents because their clientele tends to be pre-qualified and ready to buy.
The other option involves the arduous process of repeatedly cold-calling real estate agents in an area of interest to ask about off-market properties.
A new, third option for finding off-market deals now exists thanks to Homes.com.au’s innovative search technology.
The platform’s artificial intelligence (AI) driven feature, ‘Spaces’, allows registered users to find matches based on their personalised criteria, shortlist properties, or even collaborate with friends and family to search for their dream home.
“Traditional search is time-consuming and clunky, which is a problem for the buyer, and therefore, also the seller. With the right digital tools, the festive season is actually a great time for buyers to discover a personalised list of unsold on-market stock plus off-market properties,” Costa says.
“For Homes.com.au to show buyers off-market properties, the buyer has to create an account and then create a ‘Space’ – which is like a project work area – then when the buyer searches, they will be shown both on- and off-market properties. If it’s an off-market property, they will be directed to the agent for more information.”
“It’s also when buyers create a “Space” that the AI engine in Homes.com.au continues searching and showing recommendations in the background – what they call “passive search” – so you can find your dream home while lying by the pool.”
Andre Costa, Homes.com.au
“Homes.com.au gains access to off-market properties through its customer relationship management (CRM) integration with real estate agents, which uploads the agent’s on- and off-market properties.”
For real estate agents and sellers, ‘Spaces’ affords them free exposure for their off-market inventory, showing them to select buyers on the platform without spending money on a marketing campaign.