This article appeared in The Weekly Review.

I’m Mal James, a buyer advocate, and I’m having a corned beef lunch at Lynches in Domain Road South Yarra with Ron and Debbie, an enquiring couple of homebuyers.

Ron: Debbie and I have heard that some people buy homes off market and we were wondering what that all means?

Mal: Buying a home off market usually means buying a home that is not advertised, not on the Internet, and not in the papers.

Debbie: You mean a home that is secretly for sale with no agent?

Mal: Possibly no agent. Neighbours, or friends of vendors sometimes buy their homes. However an agent is still involved in most cases.

Ron: It’s hard to hide from you guys.

Mal: Yes it is.

Debbie: Should we be looking for off market homes?

Mal: Your budget should determine your level of focus.

Ron: What do you mean?

Mal: Most homes are advertised, on market, except the ultra Top End – $5million and above where, yes, a significant proportion of homes are bought and sold off market. Most homes for sale under $5million, but not all, are advertised on market in The Melbourne Review and on the Internet.

Ron: Why are there more off markets above $5million?

Mal: Numbers. Above $5million, an arbitrary figure I have chosen by way of example, there are less buyers. Smart sellers and their even smarter agents recognise that some homes can take months, even years, to sell and an off market campaign is better than a number of failed on market campaigns. Secondly some sellers like their privacy and don’t want the world knowing they have financial issues, marital breakups or they don’t want their names in the papers. Thirdly there are also security issues with expensive furnishings and large numbers of “lookers” traipsing through open for inspections.

Debbie: Fair enough.

Mal: Homes that are off market which genuinely are for sale, and are fairly priced, are worth your effort.

Ron: I detect you are saying some off market homes are not worth looking at?

Mal: Yes, some sellers ask courageous prices or are just testing the market. Some sellers have specific issues with their homes that public
scrutiny may uncover.

Ron: That sounds a bit of a worry.

Mal: It shouldn’t be a worry Ron. If you understand an off market home is no more than another opportunity worthy of assessment. Just because
it’s off market; a secret; a claimed hidden gem doesn’t make it any better than those splashed all over the media, and vice-versa. If the agent whispers you the price, asks you to keep the home “under wraps”, and you’re the only person that knows about, it doesn’t make it better. It just makes it different.

Debbie: That’s what I said to Ron. We still need to do normal due diligence.

Mal: Yes Debbie, spot-on. You need to follow the old mistake minimiser called process. Clarify – Is this what you really want? Assess – Is this actually better than the advertised ones? Negotiate – Am I actually paying fair value?

Ron: I suppose you’re saying that if it sounds too good to be true it probably is?

Mal: Not necessarily, sometimes you can buy off market homes that are too good to be true – you can buy before the rest of the market finds
them. What I’m saying is off market homes are worthy of consideration but like any home you need to have a process for normal due diligence.

Debbie: How do we find off market homes?

Mal: You can engage a buyer advocate who is experienced at your level of interest as they speak to selling agents regularly and hear about most
of the “quiet” sales. Otherwise you could look in the papers, see which selling agents are active in your area and price bracket, ring them and ask if they have any off market homes for sale. Most do and most will help you if you take the time to get to know them. However, remember that their job is to represent the seller first and you still need to carry out normal due diligence.

Ron: How would you, or do I, negotiate off market?

Mal: Good question. Sometimes there are complications such as no clear price, no paperwork and no stated time frame. A certain level of expertise is required to give you your best result. Other times off market sales run very smoothly and deals can be wrapped up very quickly – especially the ones where a seller has just bought and wants a result.

Ron: So, off market homes are something we should look at but still carry out our normal checks if we have found one we like?

Mal: Yes. Buying an off market home is not a better way, its just a different way. A home you can buy on “whispers” still needs to be the
best home for your needs to make it a good buy.