The reason to sell off market varies greatly between circumstance. Most of these reasons tie back to some motivation outside of price. If a vendor is truly wanting the highest price, chances are they are going to market. We see this often for flips, and renovations for profit.
Here are some common reasons that people will sell a property off market:
- Testing the market. They are unsure of what the property is worth, and are trialling a particular guide or getting feedback before launching.
- Distressing circumstances. Sometimes speed is important, and the process of preparing a property for market will slow them down.
- Privacy. This is common for high end properties, but also for circumstances where vendors don’t want others, such as neighbours, to know they are selling.
- A higher price. Uneducated buyers idolise buying off market, and without the open market to calibrate their feedback on price, they can pay a premium simply for buying off market.
- Marketing costs. Some vendors are motivated to save money by selling off market. Billboards, posting the property on online portals, photography, floor plans: marketing can sometimes cost more than $10,000.
- Selling as is. This is very common for investment properties that haven’t been maintained well, or properties that have been let go and don’t present well. Vendors don’t want to do work on them, so they sell as is.
- Agent networks and ease. Some agents, who prefer selling off market, have huge networks of buyers, and buyers agents. If they can get the price the vendor wants off market, without the full commitment of a campaign, some vendors prefer this process.
- Kids. Keeping a house clean, and vacating it two or three times a week for open homes, is very challenging for families. If they can bring through a small handful of qualified buyers, it will make their lives much easier.
This is by no means an exhaustive list. These are some of the more common reasons people sell off market. The key is understanding why they’re selling off market, and structuring the negotiation in a way that appeals to their preferences.