People are buying homes even before they’re advertised in a ‘secret’ house sale

When Simon Jones* and his wife set out to turn their seaside town into a South West England village last year, they knew finding the right location would be difficult. But nine months and 35 home inspections later, they were close to despair. Until that doesn’t mean a friend tipped them off to a remodeled house near his parents.

“It was his favorite house in the village. She heard it would be on the market next week because she knew the agent, so she gave us a chance to see the offer before the announcement, Jones says. All it took was one look and the offer “slightly above the asking price to entice the seller” and the house was theirs.

The so-called “secret” house sale was once the domain of the ultra-rich and famous. However, a recent study found that one in 10 homes sold this year without public advertising, rising to almost one in four in London. According to the Hamptons estate agency, the average off-market selling price has fallen to £858,000 from £1.2million in the five years before the pandemic.

Off-market sales are usually driven by the “four Ds”, says Jérôme Lartaud, who runs Bristol-based buying agent Domus Holmes. “The first is discretion and usually involves a very wealthy person or celebrity, then comes divorce, death or debt,” says Lartaud.

The race for real estate is driving sales growth out of the market (Photo: Cultura RM/Leon Sosra/Getty Exclusive)

He adds that people choose to sell off the market because they don’t want to leave a digital footprint or risk getting the wrong price. “Assessment is not an exact science. You only have one chance and [off-market sale] makes it possible to test the market when the property is difficult to value.”

In some cases, the growth of off-market sales is also driven by the real estate race. Becky Munday, whose estate agent Munday covers south-east London, has three times as many off-market sales this year compared to pre-pandemic.

“This is clearly due to high demand and limited supply,” he says, adding that potential buyers want to buy properties before coming to Rightmove, the online property aggregator.

In a Surrey village, the Foster* family had been looking for a home for nearly four years. “After accepting the offer and then collapsing after months of waiting during the third lockdown, we decided in January to call all the local agents to say we were still looking,” says Belinda Foster.

“We were lucky when we spoke to an officer on Friday who was inspecting property in the village that day. The following Monday, he remembered our phone call and invited us to watch it before it hit the market. And that was it!” They had to come up with a starting price to close the deal.

The secret sale can allow buyers to bypass agents (Image: Chris Ratcliffe/Bloomberg/Getty)

Without paying a buyer’s agent or property finder, luck will always play a big role in any secret sale. I should have known. We bought our house in 2008 without talking to an estate agent because a friend who was having lunch told us that his cousin lived on one of our favorite streets in Bermondsey and, moreover, was hoping to move.

One night we went the following week, fell in love with the house and didn’t even bother to look anywhere else. Quite by chance, we also sold our apartment at the time privately: my godmother’s son was looking for something to buy, so we invited him and that was it, although I’m sure we had to share our savings on agent fees.

Luck – or “a series of extraordinary consequences” – also led John Torode, a former political journalist in his eighties, to find an off-market buyer for a flat in Soho that his daughter wanted to sell to him so he could approach her. . These ranged from a friend of his penthouse neighbor’s friend diving in when he heard Torode was considering selling, to discovering that his buyer knew people his daughter knew from college.

“It was great for me to avoid agents and not have months of fun. I hope to trade in 6 weeks and move in August. In theory, anything could happen now, but so would if I had used a real estate agent,” he says. He split his savings on agents’ fees with the buyer.

The opportunities and connections are great, but for those out of luck, Mark Wells launched Invisible Homes in 2018, an off-market real estate platform. The list of potential buyers on the site is free. The algorithm, not the real estate agent, will match them with specific properties that might be suitable for them.

“For sellers, our platform removes the negative that comes with it [selling property on Rightmove or Zoopla] like how long they are in the market and any price drops,” says Wells, who charges members a monthly fee plus 20% of each net fee. Its site focuses on south-west London, but plans to expand to London by the end of next year, adding the rest of the UK in 2024.

Michael Foley bought a two-bedroom condo in Fulham through Invisible Homes in July 2020 after becoming frustrated with standard agencies trying to sell him the property they owned rather than find him something to meet his requirements.

“I have often felt compelled by agents to consider a compromise. Invisible Homes took my specific requirements and immediately matched me with a perfect property [and cost £720,000],” He says.

“What excites me is that we’re getting a one-bed social flat that sells right away. Beyond the market, it doesn’t have to be the domain of the rich and famous,” Wells adds. If you can use the internet for what it is good for, a) bring everyone together and b) take care of it, you have a great way to sell your property.

However, off-market sales are not booming everywhere. In much of the South West, demand is so strong that agents say people don’t need to sell early. Michael Kleinman, property adviser from Truro, Cornwall, says: “Because the market is so hot there is less incentive for sellers to exit the market when they are likely to get a better price if they enter the market. .”

I wonder if Simon Jones is happy with his purchase. Do we feel happy? Yes and no. Not in the sense that we had to pay the full asking price and some of it, and so we got something. There is always a shortage of stocks in the market. Good real estate is very hard to find. »

* Some names have been changed.

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