The rise of "Off-Market Sales" - are they really in sellers' best interests?

Perth Property Sales News & Market Insights  |  26 January 2021

Xceed Real Estate Director of Sales Performance, Jonathan Marlow, recently noticed a post on LinkedIn which caught his attention. A local real estate agent had run a 2-week property campaign that saw 43 groups of people through a property and negotiated with several buyers to secure the best offer. The agent remarked that he didn't sell it at the first viewing and he didn't sell it to his database, but the outcome was one he felt confident was in the sellers' best interests.

This prompted Jonathan to reflect on the 'science' of a buyers offering behaviour, which can be influenced by two 'drivers': 

Opportunity - this driver is determined by what else is currently available, what properties buyers may have missed out on, and how those properties compare in the market. Taken into account, these factors all point towards a logical conclusion of what a subject property is worth, in a buyer's opinion.

Competition - this driver creates an emotional buyer response, commonly known as 'FOMO' (fear of missing out), where the buyer must consider how much a property is worth, rather than how little.

There are numerous ways buyers may either perceive competition (through agent marketing and/or dialogue) or physically observe it (days on the market, buyer activity at home opens).

For example, an agent may advise their buyer database that a subject property will be going to market and suggest they make their strongest offer to avoid competing with the wider market.

Conversely, buyers may observe another party advising the agent they wish to make an offer, prompting a quicker decision to tender an offer themselves.

Is the agent who sells a property to his/her database before trying the market doing the seller a disservice?

Indeed, without competition as a driver, the seller is rarely going to receive the most competitive offer!

Jonathan went on to say;

"We would prefer to have multiple offers declined than have sellers accept one mediocre offer. As Director of Sales Performance, my role includes equipping our sales team with the skills and confidence to negotiate the best outcome, including identifying when a buyer perceives competition sufficiently.

Our team is always learning, even those with decades of experience!"

The agent who posted on LinkedIn was wise to take his vendor’s property to the market, and undoubtedly created significant competition in doing so. Agents with large buyer databases will secure the best offers when the property is taken to the wider market, or the buyers perceive that the property will be advertised publicly.

If you'd like to learn more about Off Market Sales & the 'science' of a buyers offering behaviour, call Jonathan Marlow on 9207 2088 or send us an email at hello@xceedre.com.au.