The ‘significant cost’ of off-market sales
Many sellers opt for off-market sales in a bid to save advertising costs, yet new research from PropTrack has revealed this sales strategy is ultimately damaging the final price.
According to analysis from the market insights company, houses sold off-market between July 2021 and March 2022 — a time when prices cooled significantly — achieved a sale price approximately 3.8 per cent lower than listed properties. For Greater Sydney, that gap widens to 4.2 per cent — equivalent to an approximate $60,000 difference between on- and off-market sales.
Similarly, the disparity in sales price between units sold on-market versus off-market was 1.3 per cent. That figure more than doubles for off-market unit sales in Greater Sydney, which sell for 2.9 per cent less than listed equivalents, or roughly $25,000.
PropTrack senior economist Paul Ryan said the strategy brings “a significant cost to sellers”.
“While some sellers might try to save money by not advertising online, this analysis shows the potential earnings lost in the final price far outweighs the initial cost of advertising — particularly in a market with prices falling,” he added.
According to PropTrack, off-market sales in locations where median prices range from $500,000 to $750,000 are affected the greatest, with non-listed sales collected a final price 4.2 per cent lower than those sold on-market.
Conversely, higher-price regions — with median prices above $1 million — experienced the slightest sales price decreases (3.5 per cent) between advertised and non-advertised listings; however, the dollar cost for vendors is likely higher to significantly larger transaction values.
For this reason, Ray White Preston director Ian Dempsey believes “choosing to advertise a property for sale online has never been more important than in this current property market”.
Citing a recent property sale in Preston, north-east of Melbourne, which initially received offers ranging from $1.2 million to $1.3 million but sold for $1,524,000 after advertising, as a primary example that ratifies PropTrack’s findings.
Mr Dempsey revealed he encouraged the vendors to list their home to “drive competition and reach a wider pool of potential buyers”, which ended in the interest for the property amplifying from “six inspections off-market to 224 inspections across the period of the campaign, driving the price up in only four weeks”.
“With home prices falling, a strong marketing campaign can be the difference between securing the best price possible and settling for a price below vendor’s expectations.
“Attracting the largest possible pool of potential buyers translates into inspections and, inevitably, bidders at auction or offers,” he said.
“The wider a vendor casts a net for buyers, the better because you end up with more competition and ultimately a higher price.”
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