Real estate Sydney, NSW: Popular move costing homeowners plenty

Sydney and NSW homeowners have been cutting corners in an increasingly popular attempt to save money, but it’s actually backfiring and costing them big time.

Sydney home sellers have been scoring what’s been labelled a “financial own goal” in the quest to save money – and it’s costing those who have done it an average of more than $60,000.

Estate agents reported a rise in secretive sales from homeowners wanting to offload their properties quickly through off market sales, but new research has revealed this approach has been costly.

PropTrack’s Off-Market Sales Performance report released Saturday showed that houses that never had a public sale sold for an average of 4.3 per cent lower than those taken to market over 2022.

This was estimated to equate to an average loss of about $63,000 across Greater Sydney, although there was variance across city regions.

Price differences tended to be lower for units. On market sales were an average of 2.8 per cent higher, the report showed.

Sara Perry and Karl Anthony recently sold their home in Quakers Hill for about $250,000 more than a valuation estimated it to be worth earlier this year. Picture: John Appleyard

PropTrack senior economist Paul Ryan said it was no surprise that off market sales tended to be lower, but the price difference was more significant than many vendors realised.

“This report finally quantifies it. And it’s a big difference,” he said, adding that public campaigns made a bigger impact for pricier properties.

“As properties get more expensive, it becomes more beneficial to cast a wider net to attract more people,” Mr Ryan said.

“Once you get to the very top of the market, the ultra-prestige property, it’s a different because there are only a small group of people who can afford those prices. But certainly if you take something like a $2m listing, going to market is beneficial.”

It comes as agents reported recent interest rate hikes have driven an increase in off market sales from vendors wanting to save money by skimping on advertising fees or sell quickly.

Buyer’s agent Michelle May said these sales were beneficial for purchases as they could often get a discount.

“Off market sales do tend to be a better deal for buyers,” she said. “Another benefit is the lack of competition. We often get access to these sales first, we’re often the only ones that come through the homes.”

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Buyers Agents Association president Cate Bakos said some of the differences between on market and off market sales prices could be explained by the types of properties sold privately.

“Sometimes it will be properties that are compromised and the sellers don’t want to invest in advertising because they are not confident,” she said.

Castle-Hill based agent Sara Perry of Ray White advised home sellers to avoid off market sales if they could.

“Most of the time off market is a mistake,” she said. “It suits someone where price is not important, but for the majority of people I know, price is important. Without marketing, you won’t get the best price.”

Ms Perry experienced this first hand when her and partner Karl Anthony sold their Quakers Hill home, enlisting the help of agent Kael Sharp to conduct the sale.

PropTrack senior economist Paul Ryan said public sales campaigns made the most difference for higher priced properties.

“We questioned selling at the beginning of the year. We got a valuation that showed we weren’t going to get what we put into the house, but once we saw how much competition there was we decided to take out an auction campaign.

“The property ended up getting 200 inquiries, over 100 inspections. That’s huge. At auction there were 25 registered bidders. The price was $268,000 over that valuation.”

MORE: What continues to drive up Sydney home prices, latest PropTrack data

Originally published as Real estate Sydney, NSW: Popular move costing homeowners plenty