Published by PropApp on · Updated
How does an off-market sale work?
In an off-market sale your agent offers your home privately to buyers they know or can find, instead of advertising it publicly. You still sign an agency agreement, the agent still owes you the usual duties, and the buyer still signs a normal contract of sale. Only the marketing is different.
Most Australian homes sell by private treaty, auction or tender. The Queensland Government lists sale by treaty, public auction and tender as the main ways to sell. An off-market campaign is usually a private treaty sale that is simply not advertised.
The agent's job is to bring you qualified buyers and negotiate the best price and terms they can. Consumer Affairs Victoria describes a private sale as one where the seller and buyer agree a price through negotiation, usually with the help of an estate agent.
Some sellers start off-market and go public if the right offer does not arrive. Others go off-market after a public campaign has ended without a sale.
How do you choose an agent for an off-market sale?
Choose an agent who can show you real, active buyers for homes like yours, not just a promise of a quiet sale. Compare a few agents' fees, commission and estimated selling price, ask what evidence supports that estimate, and read the agency agreement carefully before you sign it.
NSW Fair Trading recommends talking to a few agents before signing, and asking each for a printed list of fees, commission rates and expenses. In NSW the agency agreement must state the services the agent will provide, the fees and commission, when the agent is entitled to be paid, and the agent's estimated selling price.
For an off-market sale, ask each agent how they will reach buyers without advertising. Agents who use PropApp can see live buyer demand by suburb from the briefs buyers publish, which gives them a view of who is actively looking in your area.
PropApp does not sell homes itself. Your sale is run by your licensed agent, and PropApp is one of the tools that agent can use to find interested buyers.
How should you price a home you sell off-market?
Start from your agent's estimated selling price, which must be reasonable and based on evidence such as recent comparable sales. In NSW the estimate goes in the agency agreement, a range cannot span more than 10 per cent, and you can tell your agent not to share any price with buyers.
NSW Fair Trading says the agent's estimate should be based on factors such as recent comparable sales, location, property features and current market conditions, and that the agent must provide evidence supporting it and update it if the market changes.
Be cautious of an estimate much higher than other agents give you. NSW guidance warns that a much higher figure may not be reasonable, and every agent must be able to support their number.
In Victoria the agent's estimated selling price appears in the sales authority, and agents must not advise buyers of a price below it. These rules apply off-market as well, because they cover price information given to buyers, not just advertisements.
What are the pros and cons of selling off-market?
The main advantages are privacy, fewer inspections and possibly lower advertising costs. The main disadvantage is a smaller pool of buyers, which can mean less competition and a lower price than a public campaign might achieve. Many sellers test the market quietly first, then decide whether to go public.
Privacy matters most to sellers going through a separation, an estate, a job change or anything they would rather not share. An off-market sale keeps photos, price and address off public sites.
Fewer buyers is the real cost. Competition between buyers is what pushes prices up at auction. Without it, you depend on your agent knowing the right buyers and negotiating well.
Ask your agent to tell you every offer. In NSW the agent must give the seller any offers that are made, and that duty does not change because a home is off-market.
What happens after you accept an offer?
Once you accept an offer, contracts are exchanged or signed, the buyer pays a deposit, and any conditions such as finance or a building inspection must be satisfied. In Victoria a residential private sale buyer can usually cool off within three business days. Settlement then follows on the agreed date.
Consumer Affairs Victoria notes that there is no law setting the deposit amount, but it is usually 10 per cent of the purchase price, and that settlement periods of 30, 60 or 90 days are common, although you can negotiate another date with the buyer.
This is general information only. Your conveyancer or solicitor should prepare or review the contract, and the rules in your state will apply to your sale.
This guide is general information, not legal or financial advice. Rules differ between states and change over time.