Behind closed doors
It’s often rumoured we could see the end of the traditional estate agent as more people choose to sell their home online. But some buyers and sellers prefer not to have their home marketed publicly or to have any traceable details of their homes available online. In this section of the market traditional agents still prosper.
There are many reasons why people decide to sell their home off market. Sellers who are sensitive about their security and/or privacy often prefer to market their property ‘quietly’ so not to attract too much attention and only let the very best applicants through the front door. However, there are other reasons too. Landlords who are letting a property may also prefer the more discreet approach to avoid alerting their tenants of a possible sale.
The proportion of homes sold off market tends to rise when the market is weaker. That’s likely to be because sellers want to test the market quietly, gauging both price and demand without extending the obvious time their home has been for sale. It’s understandable. The longer a property is on the public market for, the more likely potential buyers are to think there could be a problem with the property, or that the seller will be more open to cheeky offers. Discreet marketing can avoid this effect. Indeed many sellers decide to pause marketing publicly to break this ‘curse’.
And it can be a successful strategy. This year one in five (20%) homes in the UK have been sold off market, up from 11% in 2007. Not surprisingly, it’s the higher value homes that are most likely to be sold off market. A quarter of homes sold for over £2 million in the UK are sold off market, compared to just 1% of homes under £500k. In London, where homes tend to be more expensive, the figures rise further. So far in 2017 one in four homes were sold off market and 27% of +£2 million homes in the capital were sold behind closed doors.
But it’s not just sellers who like this option. Buyers too like the discreet and exclusive approach – precisely the type of service that traditional estate agents provide. Being invited to view a home not available to everyone adds a certain cachet and perhaps a feeling of being able to have first chance to buy. That could help secure a better price for the seller too.
Obviously the downside of selling off market is that it limits the pool of potential buyers. That means there may be a smaller chance of finding ‘the one’. But as a strategy engaged for a limited time it can be successful in attracting certain types of buyers and sellers to homes they may not have considered. And that can show the real worth of an experienced and professional agent.