{"id":11538,"date":"2017-05-02T03:00:05","date_gmt":"2017-05-01T17:00:05","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=11538"},"modified":"2017-05-02T03:00:05","modified_gmt":"2017-05-01T17:00:05","slug":"off-market-opportunities-and-traps-michael-yardney","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/off-market-opportunities-and-traps-michael-yardney\/","title":{"rendered":"Off market opportunities and traps \u2013 Michael Yardney"},"content":{"rendered":"

What is the secret behind finding \u2018off market properties\u201d?\u00a0\u00a0 As the name implies, this type of property is one that is not listed for sale and as such offers some unique opportunities and some obvious problems for investors.\u00a0 Michael Yardney<\/strong><\/a> takes us through the pros and cons.
\nTranscript:<\/strong>
\nKevin:<\/b>\u00a0 You\u2019ve probably heard of the term off-market property, and as the name implies, it\u2019s giving you the opportunity to buy a property that\u2019s not clearly advertised, so therefore you may get it at a good price and you certainly won\u2019t go into competition with a lot of other people.
\nBut is it a reality? Are they around and is this the time for the property cycle when you\u2019ll be able to pick one up? That\u2019s a question I want to ask Michael Yardney<\/a> from Metropole Property Strategists.<\/a>
\nMichael, I know that you\u2019re in the market looking at properties on behalf of your clients all the time. Do you really ever come across many off-market properties, and if so, how do you find them?
\nMichael:<\/b>\u00a0 Good question, Kevin. The answer is yes but they fall into two categories. Most are really pre-market opportunities. We get the opportunity to inspect and make an offer on a property before it hits the Internet. It\u2019s really not off-market but it\u2019s that period of time when an agent has to get their plans drawn up to put on the Internet, get the photos done. What they\u2019ll often do is ring their A-class clients first and then their B clients on their list, and then they\u2019ll tell the other people in the office about it, and eventually it\u2019ll go on the Internet, but that\u2019s a pre-market opportunity.
\nAnd Kevin, there are occasionally true off-market opportunities where, for various reasons, the vendor doesn\u2019t want to make the sale of their property public knowledge.
\nKevin:<\/b>\u00a0 Wouldn\u2019t an agent like to take a property to market because \u2013 a couple of reasons \u2013 one, it gives them a chance to maybe put it in competition with a few buyers, but also it gives them some publicity, Michael?
\nMichael:<\/b>\u00a0 Yes. A lot of agents would prefer that, and in many instances, it\u2019s the best way to sell a property because it\u2019s going to have competition. But interestingly, some agents are keen to make a quick sale because they have complete control of the sale.
\nLet me explain it differently. If they run it in a normal campaign, the listing agent may get the initial commission but then they have to share it with somebody else in the office who brings in the client. That\u2019s why I suggested that for the first few days, they don\u2019t tell other people in the office about it and they give it to their A-list of clients and have complete control.
\nKevin:<\/b>\u00a0 Michael, in that case I\u2019d really have to ask who the agent is working for. Are they working for the buyer, or are they working for the seller?
\nMichael:<\/b>\u00a0 Or are they working for themselves, Kevin? A good agent will take the property to market, under most circumstances, get the best competition they can, and in this market, in Melbourne and Sydney in particular, it would often be at auction where you get a lot of competition facing each other and getting emotionally involved. In other areas, it may be private treaty. But I agree with you, Kevin, that the best opportunity is when you get lots of people there.
\nOn the other hand, as buyer\u2019s agents, we love buying off-market properties. Not all off-market properties are good properties or at a good price.
\nKevin:<\/b>\u00a0 Do you do any prospecting yourself, Michael \u2013 in other words, go looking for stock before it comes onto the market?
\nMichael:<\/b>\u00a0 Kevin, we tend not to ring owners or knock on doors and say, \u201cWould you like to sell?\u201d because we really want motivated vendors, because most people will sell if you offer them a high enough price. What we do is we wait for those e-mails and calls from agents.
\nWe get offered off-market opportunities a lot.
\nDavid, one of my buyer\u2019s agents who has been with me for 10 years but has been in real estate for 10 years beforehand, is continuously bombarded with off-market opportunities. 80% of the properties he bought last year were off-market, and 43% of the properties Bryce bought last year were off-market.
\nHaving said that, most of the properties we see that are off-market we don\u2019t buy, but there are a number of reasons why people do not want to go to the public arena, Kevin.
\nKevin:<\/b>\u00a0 What are they, Michael?
\nMichael:<\/b>\u00a0 For example, older people. A lot of the properties we buy are older people where it\u2019s a bit run down \u2013 because we like to add value \u2013 and they don\u2019t want people traipsing through their homes. Others are not in good health and they\u2019re in the position that they may be going into a nursing home. So often it\u2019s older people who are just a bit intimidated by the auction.
\nKevin:<\/b>\u00a0 Any other groups, Michael?
\nMichael:<\/b>\u00a0 Yes. Often we find people inherit a property and they get stingy. There are two or three brothers and they don\u2019t want to pay $20,000 for the marketing campaign and the auction campaign and the photos, and they just say, \u201cJust sell the property at any price.\u201d And they\u2019re usually doing themselves out of $40,000, $50,000, $60,000.
\nThe other group that tends to be put off-market are ones that are in poor condition, that are not well-presented, with a tenant with two big dogs, or that are totally cluttered and most people can\u2019t see through that to see the opportunities there.
\nThere are definitely some properties that are available on a pre-market or off-market opportunity. The trouble, Kevin, is being top of the list to be called about those.
\nKevin:<\/b>\u00a0 Thank you, Michael Yardney<\/a>. Good comment, and we\u2019ll talk to you again soon. Thank you.
\nMichael:<\/b>\u00a0 My pleasure, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

What is the secret behind finding \u2018off market properties\u201d?\u00a0\u00a0 As the name implies, this type of property is one that is not listed for sale and as such offers some unique opportunities and some obvious problems for investors.\u00a0 Michael Yardney takes us through the pros…<\/p>\n","protected":false},"author":176692471,"featured_media":11540,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[10,11,13,36,22,25,27],"tags":[101],"class_list":["post-11538","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"\nOff market opportunities and traps \u2013 Michael Yardney - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/off-market-opportunities-and-traps-michael-yardney\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Off market opportunities and traps \u2013 Michael Yardney - 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