While the year 2024 may lean in favour of buyers, the supply of available properties remains limited. Here we help you explore strategies for securing a home before its official listing and positioning yourself advantageously in the buyer's market.
Stepping into the competitive realm of house hunting is not just about grappling with the costs of buying a house, but also uncovering hidden opportunities. This article will give effective tips to find properties that other buyers may not have heard of, and also help you understand why pocket listings exist. Learn why it's important to work with estate agents and the strategic use of a buying agent.
Why are houses sold off-market?
Benefits for sellers
Houses sold off-market often ensure efficiency in the selling process.
Discreet sales: discretion and privacy in sales have an appeal for some homeowners. Many sellers choose this route to keep their addresses confidential and avoid the public eye.
Simpler sale procedure: some sellers want to skip the effort of listing their properties through traditional channels. This helps avoid too many viewings and open houses. They do not want to put in the work of tidying up or repairing. This route can be especially attractive in a seller's market where demand exceeds supply, enabling them to secure deals without the fuss of open marketing.
Favorable price and genuine offers: sellers may sometimes believe that they will be able to secure the most favorable price and genuine offers without a formal listing. Some believe that the exclusivity of an off-market property may prompt more serious buyers to increase their offer.
Testing the waters: another motivation comes from homeowners wanting to test the waters; they might entertain offers for their property without wanting to sell immediately.
Social clubs, Nextdoor groups, and other community-based platforms also present spaces where curious sellers might hint at a potential sale without openly listing it.
Benefits for buyers
Off-market listings, though uncommon, can be a stroke of fortune for diligent buyers who have put in some investigative effort.
Early access: buyers get early access to some of the best properties before others even have a chance to view them.
Less competition: the greatest benefit lies in encountering less competition. By discovering an off-market property, prospective buyers sidestep bidding wars and potentially secure the house at a more attractive asking price than in a public sale. Finding a house before it is officially listed, might circumvent the typical stress of real estate dealings.
What is a pocket listing?
A pocket listing is a private arrangement between homeowners and estate agents. The property isn't publicly listed on multiple services or online platforms such as Facebook pages. The estate agent holds the listing "in their pocket" and shares it privately with interested buyers.
Rules of pocket listings
In the UK, pocket listings are not illegal, but estate agents must adhere to specific regulations. The Property Ombudsman (TPO) code of practice dictates that agents must always act in their client's best interest. This means selling a property at the best possible price.
While pocket listings can be advantageous for specific reasons, agents must ensure their sellers are fully informed.
Homeowners should be aware that not openly advertising might limit potential offers, even if it offers the advantages of a quiet pocket listing. Always consult with estate agents familiar with these regulations to ensure an ethical transaction.
How to find off-market listings
1. Foster connections with local real estate agents
Local estate agents often know of off-market listings before they're public. They regularly interact with sellers considering listing their properties and may know of an upcoming pocket listing. Having a rapport with an agent can position you at the front of the queue when such listings arise.
2. Engage in community and neighbourhood events
Communities often buzz with property-related gossip. By attending community events, you embed yourself in these conversations. Locals may know of friends or neighbours thinking of selling. Establishing genuine community ties can unlock a reservoir of information.
3. Harness the potential of homeowners associations (HOAs)
HOAs sometimes have insights into properties that might be up for sale soon. Getting involved or simply reaching out can be beneficial.
4. Identify homes facing pre-foreclosure or foreclosure
Properties in financial distress often don't hit traditional listings. By recognising the signs, you can approach owners with a potential solution. Owners under financial strain might display signs like neglected maintenance. Being empathetic to their situation can lead to mutually advantageous deals.
5. Directly reach out to property owners
Approach homeowners directly. Initiating a conversation can sometimes yield results when it comes to a pocket listing. Effective methods can include leafleting to polite knocking.
Send personalised letters or postcards to property owners in your target area expressing how their house is your dream home. Sellers prefer such sentiments from buyers.
Using tools like Dietrich Direct, you can procure lists of homeowners. Crafting a sincere letter or engaging in a friendly conversation can sometimes reveal off-market opportunities.
6. Lean on friends, family, and networks
Those closest to you can be a source of valuable leads. It's about who you know as much as what you know. Word of mouth in the age of technology and personal referrals are a powerful tool. Friends might know of other friends looking to sell, so always keep your ears open.
7. Partner with a dedicated buying agent
Agents focus on finding homes for buyers by tapping into networks you might not be able to access by yourself. A buying agent can amplify your search through connections and understanding the specifics of what you're looking for, ensuring that you're among the first to know when a suitable property emerges.
8. Monitor property platforms and set up alerts
Digital platforms can notify you of new listings, ensuring you're always one step ahead. Though some properties don't get traditional listings, they might appear briefly online. Setting up alerts ensures you never miss a beat.
9. Consider the auction route
Auctions can be a treasure trove of properties that haven't hit the mainstream market. While auctions can offer unique finds, they come with a set of challenges. Be informed, ready, and aware of the process to maximise success.
10. Keep an eye on homebuying schemes and new developments
Developers and government schemes can offer first dibs on properties. Being aware of these can give you an edge.
How to become a sought-after buyer
To enhance your chances as a potential buyer in this competitive market, it's paramount that you position yourself in a stronger position. Here's how you can become an attractive buyer:
1. Ensure your finances are in order
Being financially ready is one of the greatest benefits you can present to sellers. This not only speeds up the buying process but also makes sellers more inclined to consider you seriously. Have your mortgage approval in place beforehand.
2. Shed the chain
Being in a no-chain situation, where you're not dependent on selling your own property to buy the next, can give you an edge. It means less waiting time for the seller and less hassle with cascading delays.
You can consider renting your current home and get a temporary rental for yourself. A continuous rental income frees you to move on to your next purchase.
Sellers appreciate buyers who can decide quickly. So, once you find that ideal house, be prepared to act fast. This readiness is particularly beneficial for off-market properties.
FAQs
Where should I start my house hunt?
- Begin with cultivating connections within the local real estate scene. Local estate agents can provide insights into off-market listings. By understanding your preferences, they can also recommend suitable properties.
- Start searching on traditional platforms. Leveraging technology to your advantage is smart.
- Set up timely alerts on property platforms to ensure you're among the first to know when a house matching your criteria becomes available.
- Lastly, never underestimate the value of word of mouth. Friends, family, and your wider network might just have the leads you need on off-market houses.
How can I identify a property not yet on the open market?
To enhance your chances, use a multi-faceted approach:
Active participation in your desired neighbourhood events can offer valuable insights.
Being a part of a homeowners' association (HOA) or online communities can give you a sneak peek into homes that might be up for sale soon.
Direct outreach, though a bold move, can also be fruitful. If you're genuinely interested in a specific area, consider directly reaching out to property owners. This demonstrates initiative and genuine interest.
Drop into local agents regularly and ask about upcoming listings. It can be time consuming but a dedicated local real estate agent can work wonders in your home buying journey. Their extensive networks, combined with a deep understanding of the market, ensure you're always in the loop about potential dream homes. Pocket listings remain a popular method for sellers wishing to market their homes discreetly. If you're keen on these, ensure you're in good stead with real estate agents, as their tip-offs can provide early access. Stay curious and always be on the lookout.
How much deposit is typically required?
In the UK, a typical deposit for a house oscillates between 5% and 20% of the property's price. While a smaller deposit might seem attractive, a heftier one often unlocks more favourable mortgage rates.
Given the intricacies of the housing market, it's advisable to consult with a financial adviser or mortgage broker. They can shed light on the exact deposit amount needed based on the house's price and your financial health.
Is now a good time to purchase a house?
Yes, we believe the current property climate to be in favour of the buyer. This is predicted to remain so for most of the year 2024, before changing towards the end.
Market conditions, prevailing interest rates, and even political climates impact this decision. Regularly keeping an eye on the market and seeking input from real estate professionals can offer a clearer picture of current trends.
But remember, while market dynamics are external, the ultimate decision should align with your internal readiness – both financial and emotional. Homeownership is as much about market timing as it is about personal preparedness.