PHOTO: A new report has shed light on the potential financial consequences faced by property owners who choose to sell their homes off-market. FILE

Property Owners Could Be Short-Changing Themselves by Thousands: The Impact of Off-Market Sales

Introduction

A new report has shed light on the potential financial consequences faced by property owners who choose to sell their homes off-market. While real estate agents argue that online listings can significantly boost the final sale price, the 2023 PropTrack Off-Market Sales Performance Report indicates that, on average, houses sold off-market achieve a sale price 4.3% lower than those listed on realestate.com.au. Similarly, units sold off-market experience a 1.2% price decrease on average. In certain areas, this difference can amount to over $60,000.

The Case for Online Listings

According to PropTrack senior economist Paul Ryan, the research suggests that property sellers, on average, can achieve better outcomes by opting for a public selling campaign with online listings. While some sellers may aim to save money by avoiding online advertising, the potential losses in the final sale price outweigh the initial cost of advertising.

Discrepancies in Different Regions

The study highlights significant discrepancies in various regions across Australia. Sellers in New South Wales, Queensland, and Western Australia appear to be at the greatest risk of leaving substantial amounts on the table by pursuing off-market sales.

In Sydney, for instance, houses sold off-market fetch a price 4.3% lower than listed sales on average, leading to potential losses exceeding $60,000. The price gap is even larger across the rest of NSW, reaching over 10%. In Perth, off-market house sales result in an average loss of 4.9%, while Brisbane sees a gap of 3.6%. In Melbourne, the risk of selling a house off-market amounts to 2.6%, equivalent to almost $30,000.

The Impact of Off-Market Campaigns

Real estate agent and auctioneer Simone Chin from Atria Real Estate in Brighton observes that around 80-90% of sellers who initially start an off-market campaign eventually achieve better results by listing their property online. She warns that while off-market campaigns may work in heated markets, limiting the buyer pool can lead to missed opportunities and lower prices, especially in the current real estate landscape.

Premium Markets Hit the Hardest

The PropTrack report reveals that off-market sales in higher-priced regions experience the most significant underperformance. Locations with median prices above the national median price of approximately $725,000 display a price gap of over 5% compared to properties listed on realestate.com.au.

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Sydney agent and auctioneer Matthew Everingham from Richard Matthews Real Estate shares a case where a client decided to take their historic 6-bedroom Homebush manor online. Despite initial interest in the property off-market, the sellers agreed to list it online, resulting in a substantial premium of $1.5 million above the reserve price.

Conclusion

The data underscores the potential financial implications of off-market sales for property owners. While some may prefer a private and discreet approach, the evidence suggests that the exposure and broader buyer pool facilitated by online listings can lead to significantly higher sale prices. Sellers are advised to carefully consider their options and seek professional guidance to optimize their returns.

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