Off-market or ‘on the nose’?
The term “off-market” gets thrown around more and more these days. For the record, Propertyology has never been totally comfortable with it, writes Simon Pressley.
There are some fantastic real estate sales agents out there, and our buyer’s agents are very appreciative when afforded the opportunity to consider a property before the broader public knows about it. Sometimes we buy them, sometimes we don’t.
I have general concern for the growing number of property investors who seem to place importance on whether a property is “off-market” or not.
Good decision making requires complete clarity about the primary objective. For investors, surely that means selecting a property asset by following a process that gives oneself the best chance of a good outcome over the medium to long term.
This objective has absolutely nothing to do with how one discovers the property (via auction, private treaty, a distressed sale, or an off-market property).
Let’s be crystal clear, off-market properties are not coated with gold dust!
In locations all over Australia, there are umpteen properties that sales agents bring to our attention every single week. In a lot of cases, the only reason that a buyer’s agent receives advanced notice about a property before listing for sale in the traditional fashion is because there’s something wrong with it and/or they looking to make a quick buck and move on.
I think society understands that a salesperson is only doing their job if they are trying to sell ice to an eskimo.
On the other side of the equation is the buyer. More and more Australians are growing appreciative of the various areas where the expertise of a skilled professional, a buyer’s agent, can add value.
Top of the value proposition list must be ethics, integrity and no compromises when it comes to always acting with the buyer’s best interests.
While the ability to do a (good) off-market deal when they come around is an important skill, the best buyer’s agents are never tempted to cut corners.
The right property, in the right location, at the right price is usually very hard to find. Such prudent quality control is not conducive to a high-volume business model – a sausage factory of sorts.
Property investors appoint buyer’s agents to bring expertise to the decision-making process.
Key to achieving this is having a very structured selection process.
In Propertyology’s case, the criteria for selecting an individual property is quite “mechanical”. The criteria has been shaped after many years of evidenced-based studies.
Execution of satisfying a tight selection criteria requires discipline, patience, precision and a preparedness to be fussy. Buyer’s agents are paid to be fussy, not to operate a production line.
It means rejecting hundreds of properties and only buying a select few for the right reasons.
Skill, experience and your client’s best interests has nothing to do with whether a property is being sold off-market or otherwise.
By Simon Pressley, head of research, Propertyology.
