With the property market so hot at the moment you might be surprised to hear that residential properties still sell off-market. Surely you would sell your property on the open market to maximise the chance of getting the best price with the successful party having to outbid others? Not always; an off-market sale still has huge benefits and will suit many property owners, taking uncertainty, cost and a whole lot of time out of the selling process.
A timeline of the sales process – We’ve created a handy diagram to illustrate the timescales it takes to complete an open-market sale versus an off-market sale.
Tenanted properties – If you have a tenanted property, in order to present your property in its best light we would recommend serving your tenants notice to quit (normally 2 months) so that the property is vacant and looking its best when on the open market. Once the tenant vacates it normally takes a couple of weeks to take care of any maintenance work or decoration and before you know it it’s been 3 months since you took the decision to sell your property and you still don’t have it on the market! An empty property is an expensive property and a seller will have to continue to pay any mortgage, factoring, insurance, council tax and utility costs during the marketing phase (this can be a killer for landlords who have been relying on rental income as supplementary income during the course of their ownership). For off-market sales the property can be circulated right away, with tenants in place, still paying their monthly rent and no need to ask them to vacate and to present the property for wider marketing. This means no expensive void periods for the off-market seller.
Advertising tools – For an open-market sale you require a home report, professional photographs, a floorplan and a marketing schedule which can easily take a couple of weeks to generate. For an off-market sale we tend to prepare a floorplan and take our own wide-angled photographs then pull the information into an email template and out it goes! The cost saving does not stop there; costs associated with the various online portals (ESPC, Rightmove) are avoided by selling the property off-market.
Advertising & Viewings – Once a property is on the open market it will likely take 2-3 weeks to generate interest to either accept an offer or to set a closing date. In Edinburgh there tends to be open viewing sessions on a Thursday evening and a Sunday afternoon, and any ad-hoc viewing requests from prospective buyers, which must be fulfilled by the seller. For off-market sales we circulate property details around our list of ‘warm’ investor landlords, matching the property with their investment requirements, ensuring a much more targeted marketing of the property.
Certainty of price – For open-market sales a property will tend to be advertised at an ‘offers over’ or ‘fixed price’ level which, rather counter-intuitively still leaves room for negotiation (why does ‘Fixed Price’ not mean ‘Fixed Price’?!). For off-market sales we circulate properties with a price, outlining the property rent and yield, calculated against the quoted sale price and potential purchasers are able to do their sums based on all the information presented. If you have a figure in mind that you would like to achieve for your property, advertising the property off-market is a nice easy way to test this price.
Fees – On top of costly void periods, marketing costs and advertising costs an open-market seller will also have to pay estate agency fees, typically 0.75-1.5%+VAT of the sale price. We charge a fee equivalent to 1%+VAT of the sale price to sell properties off market.
Conclusion – So there you have it. There are some huge benefits to selling a property off-market. While an open-market sale if a very good option for a lot of property owners, exposing their property to the whole market and maximising the chances of getting a high sale price. However, typically an open-market sale can take 5 months to complete whereas an off-market sale can be completed in a couple of months. Yes, you’re eliminating the chance of some ‘nutter’ paying well over the asking price to secure the property on the open-market. However, with an off-market sale you have much more certainty and can avoid the costs that mount up with an open-market sale. An off-market sale speeds up the whole process and takes a lot of the stress and uncertainty out of the selling process.
If you’re interested in exploring the opportunity to sell your property off-market please contact our investment manager Chris on 0131 221 0888 or by email at [email protected], who would be delighted to help.