Vendors who choose to roll the dice with their properties by selling off-market are losing out, according to new data.
A new report from PropTrack comparing sale prices for houses sold off-market with those listed on realestate.com.au, found on average they sell for 2.6 per cent less.
Paul Ryan, PropTrack Economist and report author said consumers chose 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,” said Mr Ryan.
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.
“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,” said Mr Ryan.
“The evidence shows advertising online draws a bigger audience, increased competition and a larger sale price.”
Key report findings
• Of properties sold in 2019 and 2020, houses not listed on realestate.com.au sold for 2.6 per cent less than those listed on the platform, on average.
• Sellers in NSW, Victoria and the ACT are worse off when choosing to sell off-market relative to other states. In Sydney, houses sold off-market achieved prices 2.7 per cent lower than other sales, while they sold for 4 per cent less in Melbourne and the ACT. This equates to a loss of more than $30,000 on average.
• 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.
• The average loss from selling off-market is often tens of thousands of dollars, far more than typical listing costs.
Ray White TNG Director, Shiv Nair, said it was the role of an agent to market, negotiate and extract the highest sale price possible.
“Selling off-market or advertising online has always been a topic of discussion for vendors, but it is now more important than ever,” Mr Nair said.
Today’s strong market conditions with high buyer demand was more of a reason to invest in marketing so your vendors could truly extract the highest possible sale price, he said.
“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? I could sell a property off-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.”
Mr Nair 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.
“I advised my sellers to list on the market because I believed there was a higher price achievable.
“After listing, we had over 30 groups on the Saturday, multiple offers, with final negotiations and contracts signed the same evening. All because of the right marketing strategy,” Mr Nair said.