Updated 22 Jul 2023, 7:39am
First published 22 Jul 2023, 12:02am
Property owners could be short-changing themselves tens of thousands of dollars by choosing to sell their home off-market, a new report has found.
But real estate agents say in some cases, listing online can add hundreds of thousands – or even millions of dollars – to the final sale price.
Homes selling for less off market01:35
The 2023 PropTrack Off-Market Sales Performance Report found that on average, houses that sold off-market achieved a sale price 4.3% lower than those listed on realestate.com.au. Units also saw a discount, with off-market sales delivering 1.2% less on average.
PropTrack senior economist Paul Ryan said in some areas, that can be a price difference of more than $60,000.
“The results of this research suggest that sellers, on average, will achieve better total outcomes by listing their property online with a public selling campaign,” Mr Ryan said.
“While some sellers might try to save money by not advertising online, this analysis shows the potential earnings lost in the final sale price far outweighs the initial cost of advertising.”
The data compares the sale prices of properties that sold off-market over 2022, against those that were listed on realestate.com.au.
For the purpose of this analysis, ‘off-market’ includes all sales not matched to listings on realestate.com.au, and can include exclusive listings on alternative platforms.
How much sellers could lose out
Sellers in New South Wales, Queensland and Western Australia saw some of the biggest discrepancies, with vendors potentially leaving tens of thousands of dollars on the table by selling off-market.
In Sydney, houses sold off-market achieved a price 4.3% lower than listed sales, on average, equating to a loss of more than $60,000. Across the rest of NSW the price gap was more than 10%.
In Perth, off-market house sellers recorded average losses of 4.9%, while Brisbane saw a gap of 3.6%. Melbourne sellers risk 2.6% selling their house off-market, or close to $30,000.
Melbourne real estate agent and auctioneer Simone Chin from Atria Real Estate in Brighton estimates around 80-90% of sellers who start an off-market campaign go on to achieve a better result by listing their property online.
“People sometimes try to do it just quietly at the start, but it doesn’t yield as great results or as frequent results as perhaps some in the industry may wish people to think,” Ms Chin said.
PropTrack estimates homeowners could be risking tens of thousands of dollars by selling off-market. Picture: Getty
She said that while off-market campaigns can work in very hot markets, limiting the buyer pool can leave a lot on the table – particularly in the current environment.
“You would be going to an historical active buyer, someone that an agent has met in the last quarter or the last 12 months and it’s missing out the whole raft of new buyers that we know come in every 45 days or so, which is where the exposure on the internet is so strong and powerful,” she said.
“Not only are those buyers picked up on a regular basis as the cycles move through but there’s also eyes overseas, there are expats, there are people who have not perhaps engaged on the street with going to see inspections, but they’re doing their research online.
“They’re the buyers that you’re missing out on if you’re thinking you’re just going to do it quietly and discreetly.
“It’s a bit like you’re selling a secret, and you might only have three buyers looking at it, instead of 100 which is much better for your price.”
Bigger price gap at the premium end of the market
The PropTrack report found off-market sales in higher-priced regions underperformed the most.
“Over the period of slowing property price growth in 2022, off-market sales in locations with median prices above the national median price of around $725,000 performed the worst,” Mr Ryan said.
“In these areas, the prices of off-market sales were more than 5% lower than those listed on realestate.com.au.”
Sydney agent and auctioneer Matthew Everingham from Richard Matthews Real Estate said a client recently achieved a $1.5 million premium by agreeing to take their historic 6-bedroom Homebush manor online.
“Their preference was definitely to sell it a little bit privately and quietly if we could given the profile of the home, and we did get a large number of people inspect it,” Mr Everingham said.
91-93 Abbotsford Road, Homebush set a suburb record of $7,425,000 at auction, with 7 bidders and 300 people watching. Picture: realestate.com.au/sold
Despite strong interest in the home off-market, buyers were tapping out at around $5.5 million, and the sellers agreed to list the property online.
“They had a reserve price of $6 million, and it ended up selling for $7.425 million, which was $1.4 to $1.5 million above reserve at auction.
“As an agent, I didn’t think it was worth $7.425 million but the market did, and we would never have achieved that if we didn’t go out there, explore it, get it online, have a great auction campaign and evidently it was well worth doing.”