With Perth homes selling fast, many people looking to offload their abodes are finding no need to let everyone know; but in doing so, are they running the risk of their homes being undervalued?
Known as off-market sales, the practice involves selling a property without public marketing or listing in the usual online and print channels.
Edison McGrath Residential Sales Consultant Christopher Dee said while off-market sales had always existed in Perth, he noticed this sales method had become increasingly popular recently due to the low home supply brought on by the COVID-19 pandemic.
He said the current buoyancy in the market offered a range of comforts to sellers, who were said to be particularly partial to the increased privacy enjoyed when homes weren’t advertised.
“Current low stock levels in the Perth market have led to an increase in off-market activity and sellers have seen an opportunity to sell in a discreet and private manner,” Mr Dee said, noting the disruptions avoided by hosting minimal home opens.
“But, on the flip side, not opening the property up to a public sale means there is no buyer competition which typically forces the sale price up.”
It is a sentiment shared by Realmark Urban Sales Representative Miles Garner, who said many homes were currently being undersold.
He said it was not necessarily because owners were underpricing their homes, but rather because they were being sold too quickly.
“Sellers are fixated on selling in 24 hours, or even off-market to an agent’s ‘exclusive’ database,” he said.
“This fixation is mainly being fed by agents promoting these quick sales as success stories when a majority of the time they are far from that.”
In the current environment, Mr Garner believed it wasn’t a question of if your home would sell, but when.
“As an owner, you are almost guaranteed multiple offers on your home,” he said, though he cautioned the danger of selling too quickly was the simple likelihood of fetching a lower price.
“You run a large risk of underselling your home because you haven’t given it the exposure it deserves and shown the full market of buyers what your home has to offer,” he said, citing a recent sale he made in Mount Hawthorn as an example.
“After the first weekend, we could have sold the home to multiple buyers, but we stuck to the set date sale process and opened the home for the second weekend.
“That second weekend, a new buyer came to the property and, upon the set date, secured it.
“The buyer obviously had the most desirable terms and conditions, hence why the owner sold it to them.
“If we had sold the home after the first home open, we would not have met this buyer and we would have 100 per cent undersold the home.”
Mr Dee said he had handled many off-market sales over the years, which people usually looked for after missing an on-market opportunity.
He said home hunters might also feel a little left out when they saw a sold sign on a property which was sold unadvertised.
While he said the selling method might work in the right market conditions, Mr Dee recommended any motivated seller choose the mainstream method of palming off their house, including the support of a marketing campaign.
He said this brought in healthy buyer competition and led to sellers achieving a premium price.
“Off-market selling isn’t a new concept and it will continue,” Mr Dee said. “Whilst it’s not for everyone, it will suit those people who want a discreet private ‘ships in the night’ sale.”
The upside for those on the other side of the transaction is buyers are not forced to make a hurried decision and can properly assess their options, according to Mr Garner.
“Buyers are thankful they have time to view the property multiple times and throw their hat in the ring with an offer,” he said.
“Buyers who have missed out on properties with me have taken the time to call me and thank me for giving them the opportunity to participate in the process.”