Vendors selling their homes off-market could be costing themselves plenty

Homeowners could be costing themselves plenty by opting to use an alternative approach to selling their property. Here’s why.

Selling a home off-market might be potentially costing sellers thousands of dollars in Sydney and regional NSW.

New research from the PropTrack Off-Market Sales Performance report analysed sales prices for off-market houses and compares them to those listed on realestate.com.au.

On average, the report found off-market listings sold for 2.7 per cent less in Sydney during the 2019 and 2020 period.

This equates to a loss of more than $30,000 on average.

Selling a home off-market might be potentially costing sellers thousands of dollars in Sydney and regional NSW. Picture: Richard Dobson

Selling a property off-market has become increasingly popular over the past two years due to the health restrictions of the pandemic making physical inspections near impossible to do.

In regional NSW the difference is even greater, with houses not listed on realestate.com.au selling for 5.5 per cent less.

Off market sales in locations with median prices between $250,000 and $500,000 perform the worst. In these areas, off-market sales achieved 3.7 per cent lower sale prices.

MORE: Towns set to boom in regional NSW

Rate pain coming for 1 in 5 homeowners

In regional NSW areas, such as Byron Bay, the difference is even greater, with houses not listed on realestate.com.au selling for 5.5 per cent less.

The average loss from selling off-market is often many tens of thousands of dollars – far more than typical listing costs, and suggests most sellers are likely to make a bigger return despite the cost of an online marketing campaign.

PropTrack Economist and report author Paul Ryan said: “Consumers choose to sell properties off-market for a number of reasons including testing interest in the property without incurring fees.”

“Vendors need to be aware that the decision to sell off-market may come at a significant cost.

“While some sellers might be trying to save money by not advertising online, the potential earnings lost in the final sale price are estimated to far outweigh the initial cost of advertising, on average.”

“Vendors need to be aware that the decision to sell off-market may come at a significant cost.”

“Sellers and agents both want to achieve the highest sale price possible, and we know that creating competition is the best way to accomplish that. The evidence shows advertising online draws a bigger audience, increased competition and a larger sale price.”

Shiv Nair, Ray White TNG Director, recently sold a property in Sydney’s Glenwood for $1,260,000 within one week of advertising on realestate.com.au, after previously attracting offers below $1,150,000 while the property was available for sale off-market.

“Selling off-market or advertising online has always been a topic of discussion for vendors, but it is now more important than ever,” he said.

“Today’s strong market conditions with high buyer demand is more of a reason to invest in marketing so you can truly extract the highest possible sale price.”

“Why sell with minimal buyer competition?” Picture: Ivan Gastaldon Architects.

“With the power of online marketing, we are able to attract the maximum level of interest and attention, therefore creating the highest amount of buyer competition, which will result in a premium price for the seller.”

“Why sell with minimal buyer competition? As the number one agent in my core area with 33 per cent market share, I could sell a property-market via my database, but if you are a seller whose main focus is maximising the sale price of your home, then my recommendation is to invest in marketing.”

In all regions of Australia, the report noted that sellers could still make a return despite the cost of listing by selling through public, or on market, campaigns.

However, there are some valid reasons why sellers might consider placing their property off market.

These include personal circumstances, or specific features of the property that may differ from those sold on market.
MORE:

Proof 2021 was a bumper year for sales
Byron estate drops with $14m price tag
Enormous gothic-style castle for sale

Originally published as Vendors selling their homes off-market could be costing themselves plenty