Up-and-coming buyers vie for the best family houses in good locations. But many won’t even get a chance to see them if properties are sold before they even hit the market.
More than 37,000 homes were sold off-market in the first three months of this year – the highest quarterly number seen in a first quarter since real estate agent began records in 2007.
In the case of an off-market sale, the property will not be publicly marketed. The sale is arranged by a buyer and customers who want to make a purchase without having to go into a bidding frenzy.
Behind closed doors: Traditionally, sales outside the market were reserved for the rich and famous
Traditionally, sales outside the market were reserved for the rich and famous. But this year average family houses in cheaper price ranges are being sold this way – not just exclusive villas or penthouses.
This means that buyers could miss out on some of the most sought-after properties if they don’t keep their ears to the ground or don’t hire a put on-market buyer.
Jo Eccles is the founder of the real estate consultancy Eccord. She says, “Three years ago only about seven percent of the sales we monitored were outside of the market, and it was usually where discretion was required.
This year 30 percent have been taken off the market. ‘Eccles, who oversees sales in London, says growth is being driven by quality family homes in residential areas like Hampstead, St. Johns Wood, Notting Hill, Richmond and Chiswick.
Sellers go off the market for two reasons. One is to protect your privacy. Alexander Millett, founder of a real estate agency in Central London, says, “When salespeople are high profile, they often don’t want pictures of their home on the internet. And sometimes salespeople just don’t want their neighbors to virtually snoop around their home. ‘
The second reason is to test an “ambitious” price to see if buyers are biting. When a property is listed on the open market, real estate portals like Rightmove give it a date stamp that registers when it came on the market and the original asking price.
If the property doesn’t sell right away or the seller needs to lower the price, buyers can see this in the listing and it can undermine the seller’s negotiating position.
When someone sells outside of the market, there is no record of the original asking price or how long it has been in the market. If it isn’t sold off-market, they can still go to the open market – with potential buyers who are no smarter.
Agents say the real estate market is so hot right now that homeowners who are leaving the market are more likely than ever to be successful. “A lot of sellers go off the market just to test the water and then find out that their property was snapped up immediately,” says Millett.
Patrick McCutcheon is the Head of Home Sales at Dacre, Son & Hartley estate agent, which sells properties across Yorkshire. He says off-market sales are usually focused on the most expensive properties, but over the past year they have become common among those selling for less than £ 1 million.
“Sellers of desirable family homes are finding that they don’t have to take advantage of the free market,” he says. “That way, they may get an even better price because buyers get the chance to buy without competition.” Buyers can even pay a premium because of the exclusivity offered to them.
McCutcheon adds that due to Covid fears, many sellers didn’t want many potential buyers to look around their home. Hence, off-market sales have proven to be a good solution.
The most sought-after homes in Yorkshire are family houses from the 1920s built from stone by textile barons. “They are honest Yorkshire houses with elegant proportions, beautiful facades and deep Yorkshire roots,” he adds.
McCutcheon has also seen an increase in buyers from London and the South East looking to move to Yorkshire.
“They usually make up around 18 percent of buyers – but now it’s almost a quarter,” he says. “People want a better lifestyle and are happy to catch the early morning train to London’s King’s Cross and come home on Wednesday or Thursday.” Good family homes are also driving the growth of off-market sales in Oxfordshire, Gloucestershire and the West Country.
Jess Simpson, who specializes in buying land, says, “So many people want a completed Georgian rectory on the edge of a picturesque Cotswold village with large gardens and maybe a few outbuildings.”
“We haven’t seen such an off-market since the 2008 crash,” she says. “But this time it feels different – people buy for the long term.”
As off-market sales between homes rise, homes are being left behind.
“It’s a different story for two-bedroom apartments in town,” says Eccles.
‘Covid has created a wealth gap that is playing out in the real estate market. “Sales are driven by wealthier people who want outdoor space, a good quality of life, and a beautiful family home.”
Stuart Flint took his family home in South Warwickshire off the market last year and says there were great benefits.
He says, “The process is more orderly because fewer people are involved.
“Selling off-market means dealing with focused, well-funded buyers who are in control of their finances. The process is smoother and less stressful. ‘Flint is the head of the real estate agency Fisher German and is therefore well established in the market. However, he believes that others can do the same without his experience.
“If you have a home that you know is market-worthy, you can give some feelers to the buyers who operate in your area. They are always keen to hear about real estate before it hits the market. ‘
He says the best agents can be found by looking up who’s most active on platforms like Instagram.
However, he warns that sellers need to be smart because agents work on behalf of buyers. “You have to be very careful to make sure you have the right course objective,” he says.
Flint points out that this route may be cheaper for some people in certain markets, but going to the open market is still the best option for most sellers.
An increase in the number of real estate agents also leads to out-of-market sales. They get to know an area well and may have access to information on when homeowners want to sell before they are listed in the open market.
Agents have spread their wings over the past year, according to Flint. “There have always been agents in London, Home Counties and the Cotswolds,” he says.
“But now we’re seeing them west of the M5 – in Worcestershire, Herefordshire and Wales – and breaking into Northamptonshire, Rutland and Leicestershire too.”
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