Expert Insight – Buying A Home Off Market
This article was originally published by our friends at DBPR.
We asked some of the leading buying agents whether we are increasingly buying/selling luxury homes off market. David Lee, Head of Sales at Pastor Real Estate, told us that “higher value properties (typically above £10m) are often launched to the market discreetly– with no advertising at all.
These off market properties have no online visibility. This is mainly to provide discretion for both the buyer and seller and is particularly true at the moment where homes are taking a lot longer to sell and vendors are cautious to avoid properties look stale on line. Buying agents are skilled at finding such properties; linking buyers and sellers together through their own network of contacts.
Managed by Brokers
So it seems that, increasingly, as vendors are insisting on no public visibility at all, the market is being managed by ‘brokers’ who are busying themselves behind the scenes. Adam Buxton of Middleton Advisors, who is most active in the Cotswolds, told DBPR that, last year, “…only one property was bought above £2.5m without a buying agent”.
Middleton’s Mark Parkinson said that 10 years ago he would typically speak to approximately five agents for property searches over £25m – now he will make more than 30 calls to a variety of agents and brokers who are ‘secretly’ active in the market. “The online portals such as Zoopla and Rightmove are missing up to 50% of what is actually available – the industry is very definitely changing.” he explains.
Password Protected Website
Marc Schneiderman of Arlington Residential, told DBPR that he has access to four or five off market properties in London NW8 alone with asking prices of between £40m – £50m. These vendors will not allow any ‘public’ presence at all. So much so that if he has a seriously interested potential buyer, they will be given access to a password protected website and there will be non-disclosure agreements required for everyone! He explains… “the challenge is to keep these super prime properties as secret as possible; at the same time as trying to find a suitable buyer.”
One Step Ahead
Simon Barnes of H. Barnes & Co says that “the buying agent’s role has never been so widely in demand, or so important at the prime level of the market. Peace of mind is priceless and the right buying agent will hold your hand to ensure you avoid mistakes and buy well.”
He says that many of London’s most desirable properties never come to the open market and buying agents always have an ear to the ground and access to properties that are off market or under the radar. “Being one step ahead is key and what makes a buying agent’s services so valuable. Time poor, cash rich individuals are not in a position to build the strong relationships with estate agents, to ensure first access to properties hitting the market, or crucially to be made aware of those that don’t ever get there”.
Tom Hudson, Director, Middleton Advisors (country), told DBPR that “the majority of houses in the Middleton country market are owned by discretionary sellers. They do not have to sell and, as a result, they tend to ’try’ the private market to see whether their expectations can be met and if there is a buyer out there. This is increasingly the case at a time when transaction numbers continue to fall, and the vendors find valuation using comparable sales very difficult.
As a result, we will always have a book of opportunities far greater than any portal and selling agent. There tends to be a quality play here too – for whatever the reason, the very best houses tend to be the ones that sell privately. Although this is not always the case, these discretionary sellers are jumpy about friends and invariably staff, finding out that they may be selling. They are keen to avoid ‘announcing’ this to the world if the buyer is not evident, as they will just stay where they are”.
Giles Cook, Head of Sales at Best Gapp, told DBPR that “the acute shortage of ‘best in class’ properties, driven by less than favourable market conditions, has fuelled the increasing number of ‘off market’ sales in PCL. Sellers of such properties recognise theirs is the best flat in the building, or the perfectly positioned house in the middle of a prime garden square, and will typically not want to publicise what they’re planning.
Only a handful of privileged buyers will be made aware of its availability, which in turn creates exclusivity. Be warned, purchasing a property off market will typically come at a premium price, however wealthy buyers looking to own a slice of prime central London real estate, understand that more often than not, it is worth paying extra to get what you want. There could also exist (subject to obtaining any relevant consents) a marriage value for someone looking to buy the flat next door/above to amalgamate the two or to buy the mews house behind to add extra living space for staff, and possibly garage parking. The most lucrative property deals often happen as a result of a chance meeting or conversation, and as ever timing is everything”.