All the best houses can be found on Rightmove, right? Well, actually no. Increasing numbers of properties are being sold ‘off-market’ in an environment where there’s very little supply and a range of motivated buyers. How can you access these properties if you’re looking to move and how can you avoid getting stung?
There are some interesting misconceptions about the way the property market, particularly the residential market, in the UK works. Understanding the competing forces is wise in such a competitive market. Many forget that the role of an estate agent is to look after the interests of the seller, not the buyer. When you see a property online or via an estate agent, they’re showing you what they have on their books. The price of a property is determined partly from advice by the agent and often with the wishes of the vendor taken into consideration. As a buyer, you’re often left in the dark as to how much a property is worth and simply must make an offer based on what you can afford, what you think it’s worth and how much you want to pay. It’s actually a very imperfect market.
All this begins to explain why, in other countries, very often there’s an agent engaged by the vendor and one by the buyer too. This does mean two sets of fees, but at least both parties have an equal advocate in the deal.
Whisper it, but this system has also been seeping into the upper echelons of the UK market for some time now. Search agents have been a feature at the top end of the market for decades. And for several reasons. If you’re well known or wealthy, do you really want to traipse around a whole load of houses or properties unless you know they really are available and that you have a good chance of securing it at the price you want to pay? Similarly, do you really want everyone to see what your house looks like, how it’s furnished and without qualification let anyone come and view it? Probably not. Hence the concept of only accepting viewings from qualified or motivated buyers.
There are other reasons why you might not want your property listed on the open market too. For example, you know what you want to achieve in terms of a price, and you’re only motivated to sell at that price and therefore don’t want to engage in the rough and tumble of an open marketplace.
As a buyer if you don’t want to engage the services of a buying agent there are ways you too can get to see these properties. But you’ll have to work hard and get your ducks in a row.
I made a professional career out of acquiring real estate for buyers, admittedly in the commercial arena but the same rules applied. The key was becoming known to vendors as a sure fire for having qualified buyers ready to go. So, when it came to buying my own home, I knew I needed to become a qualified buyer myself. I’d identified the property as the house I wanted. I made sure that the local agents knew that I was the person who wanted to buy it and when it was ready, I’d be ready to move. Sure enough and before any other marketing was done, I received the call. Yes, the price was at the top end but because I’d done my homework, it meant that when the property did come to the open market, the deal was all but done.
Here are my top tips.
Offer certainty
The first thing sellers value over almost anything else is certainty. Are you good for the money you offer? Buyers often rely on sorting out their finances later, after the offer is in. To put yourself to the top of the list, you’d be wise to have either a bridging loan in place, a mortgage agreed in principle or having sold your existing home and ready to pounce.
What do you really want to buy?
A buyer who knows what they want is a rare commodity! You might think this is an odd thing to say, however so many buyers will happily look through dozens of properties and that’s exactly what the vendors who don’t openly want to market their properties wish to avoid.
Know your agent
If you don’t want to go to the expense of hiring a property search agent (and you could save yourself up to 3 per cent of the asking price by doing this) you must do the job they do. They’ll only take on clients who have really shown they are ready to buy, know what they want and, know the market they are playing in. Often buyers select a firm of estate agents, based on the brand or market share. However, within every estate agency there’s usually one of their team who is that brand. And you need to find out who that person is and get to know them, ensuring that you’re at the top of their list of buyers who’s ‘ready to go’. They’re the person within the agency who needs to know exactly what you’re looking for and what you’ve done to ensure you have the funds available. This person has the best contacts, takes the instructions and they’ll have access to the ear of vendors of properties that are yet to come to the market or will never be openly marketed. If you understand this key agent’s view of the market, you’ll be able to resonate with any offer you make. They are the gatekeeper and, if you’re really serious about it, take them to lunch. Estate agents love a good lunch.
Don’t muck about on price
Understanding the motivation of the seller is one of the key areas to success. Sometimes a seller is only motivated by price and achieving the upper end of their expectations. Sometimes, however, they’ll want to simply have a transaction that reduces the stress of an open market sale. So, you’ll need to be ready to make an offer that appeals to the vendor allowing them to give you a period of exclusivity to get the deal done.
Track a property
I have always advocated pinpointing not only where you want to live geographically but the two or three houses or flats that are top of your list. Know the property, know the street, and monitor everything that happens in the locality. That means if your chosen property does become available, you’ll not only feel comfortable with making a move, but you’ll have first mover advantage because you’ll be up to speed on whether it’s for you, the price and what’s on offer.
Increasingly, as home owners want to take advantage of a competitive market, we’ll see this trend for unlisted properties grow. So it’s wise to get a handle on how this new market operates by doing your homework on your buying area and agent and being move-ready when you do get early notice of the right house.
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