If you are a property investor who has been looking to secure a new property recently, you are no doubt all too aware of how tough trying to buy a property at a reasonable price can be in a fast-moving market such as the current one. The stamp duty holiday coupled with potential buyers having saved more money during the pandemic has led to properties being snapped up instantly, in some cases, even before they have been placed on the market.
In fact, a recent study on house prices across the UK has revealed that a quarter of properties have sold for £30,000 to £40,000 over the asking price during this post-pandemic property boom as desperate buyers bid against each other trying to secure their new homes.
So how can you ensure that you won’t be caught out by the rising price of incessant bidding wars? Could buying an off-market property be the answer?
What is an Off-Market Property?
First, before we find out some top tips for buying an off-market property, let’s find out what exactly is meant by the term off-market property.
Well, the clue really is in the name. An off-market property is a property that isn’t listed or advertised on the open market.
This method of sale can be chosen for several reasons. For example, off-market selling is commonly used for high-value sales – where the seller does not want to publicly advertise the property is for sale, or where they want a very controlled sale without hundreds of timewasters traipsing through their doors. It is also a popular way for high profile sellers, whose security could be compromised by their property details being listed on a public database, to sell their properties.
However, off-market selling can also be a useful way for landlords to sell their property, with tenants in-situ, on to another investor. Selling their property off-market can help landlords avoid void periods where the property is empty because the seller has had to give the tenant notice that they were selling it, thereby risking them moving out, instead they are able to sell with the tenant in place to another property investor without unsettling their valued occupants.
Sellers of off-market properties can also save on the marketing costs associated with having photographs taken, brochures produced and newspaper advertisements placed. This point leads to another benefit that sellers of off-market properties don’t have to wait for all the marketing copy and photographs to be taken to start selling their properties. They can start selling immediately.
Which Estate Agents Sell Properties Off-Market?
It’s not widely advertised but most estate agents have an off-market sales offering, so if it is of interest, do make sure to ask when they come around to do their valuations, what their off-market offering is.
Three Ways to Source Off-Market Properties
So, now that we have defined what off-market property selling is and why people choose this method of selling their properties, let’s take a look at the three tips our experts say you can employ to reduce the competition with other buyers.
Financial services comparison website, Money.co.uk has teamed up with Sophie Cope from Mojo Mortgages, to reveal just how you can find yourself a dream property and reduce the competition when it comes to buying a property by buying an off-market property. Let’s find out what they are below…
1. Network with your local agents
If you’re going to view multiple properties in your local area, you’re going to become accustomed to regular calls and meetings with the local agents, so it makes sense to build and develop these relationships as early as possible.
Now that restrictions have been lifted, one of the best ways to do this is to pop into your local estate agent and get to know the agents and put a face to the name. This is also a prime opportunity to ask about properties due to come on the market imminently and express your interest. If an eventual seller needs a quick sale, the pressure on an agent can be dramatically reduced knowing they already have a potentially interested buyer in line – particularly if you have no chain and want to move quickly!
2. Maintain a strong relationship with your neighbours
It may sound obvious but another effective way of finding out when properties are due to come on the market near your current residence is to keep in touch with your neighbours. Mention that you are on the hunt for another house nearby and you may be surprised how often someone has heard of somebody local that’s looking to move in the near future.
Don’t be afraid to ask for an ‘in’ to any potential sellers ahead of the property going on the market – having conversations with the seller ahead of the sale formally going to market could save both buyer and seller thousands of pounds.
3. Keep an eye out for new developments
Look out for construction notices that may indicate building is due to commence in the area in the coming months, as this can often be the trigger point for those that have been thinking of moving for a while to finally up sticks.
This could be the development of a new retail or business park, school, or leisure facility – something that may benefit one homeowner but is seen as a hindrance to another.
Sophie Cope, a home buying expert at mortgage broker Mojo Mortgages, advises buyers: “Before viewing any property, it’s important to do your research to get a rough understanding of its market value and not be swayed too heavily by other factors such as pressure from the agent, emotion, or current market conditions. Yes, offering 10%+ above the asking price is likely to result in a successful purchase, but it could end up coming back to bite you in the future when going to sell the property.”
Nisha Vaidya, mortgage expert at www.money.co.uk/mortgages.htm which compiled today’s data, added: “When buying your dream home it can be devastating to lose out because of a higher offer from another buyer and all too tempting to go in with an even higher offer to secure the property. However, you must be careful to not overstretch yourself financially in the race to collect the keys.
“Always make sure you have done a full budget and financial plan before counter-offering and be willing to walk away if the property becomes unaffordable. It’s a bitter pill to swallow but will save you from money misery in the future.”
A fourth tip for finding off-market properties that the experts don’t mention is to advertise your interest on local Facebook groups or mailing lists to ask if someone (or someone they know) is thinking about selling their properties. You never know what property gems might be presented to you.
We hope our article has been informative and helps buyers expand their search options in this busy market.
Have you bought or sold a property off-market recently? We’d love to hear.