As homebuying continues apace, families are turning to the secretive ‘grey market’ to find a buyer for their home without ever advertising it for sale.
Also known as off-market sales, the grey market is when homes are withheld from mainstream portals such as Rightmove and Zoopla and, instead, sellers choose a private agent to handpick a potential buyer. Sounds exclusive? It usually is.
But estate agents have reported a rise in Covid- conscious homeowners and internet-shy sellers who are turning to more discreet ways of selling a home.
Top secret: As homebuying continues apace, families are turning to the secretive ‘grey market’ to find a buyer for their home
Why keep a sale secret?
Perhaps you want your financial affairs to remain private.
You have a fear of splashing the price of your home over the internet and might not want your friends to know what cash you have rolling in. You also might not wish your boss to know you are moving.
‘Selling off market is a technique that’s as old as the hills but more important than ever,’ says Nick Wooldridge, of Stacks Property Search (stacks.co.uk).
‘And in Covid times the market is growing. Vendors do not want a stream of potential buyers viewing their property with the health risks it involves — so the grey market acts as a filter.’
In the first nine months of this year, a greater proportion of sales in London were made off market than in the whole of 2019, up from 11 to 15 per cent, according to Hamptons International (hamptons.co.uk).
Some homeowners, such as Richard, 43, and Maria, 47, who live in Germany and do not wish to reveal their surnames, chose a private sale to avoid leaving a digital trail of how long their property had been on the market and any previous price tags.
They signed up with London agent Invisible Homes (invisiblehomes.co.uk) to sell their West London terrace house.
Properties are only advertised for sale on the firm’s own website. Buyers must register to see the properties and they are only permitted to set foot through the door if their requirements and budget match the seller’s home.
‘We liked the idea of controlling the exposure of our property,’ says Richard.
‘There’s no way of telling how long a property has been on the market. If a house takes longer than a month to sell, some buyers will think something must be wrong.’
Founder and chief executive of Invisible Homes, Mark Wells, says that internet privacy has been a big driver in rising numbers of sellers wanting to keep off the main portals.
‘Sellers want their homes to remain appealing for more than just the first two weeks,’ says Mr Wells. ‘So by protecting some of the details, we can maintain the property’s allure.’
Your agent keeps a list of buyers who have made contact with a specific set of requirements for their new home.
They are put through a rigorous interview process to establish details such as where they work, where else they have searched for a home, and their financial position.
The ‘list’ is the agent’s first port of call when instructed to act for a secret sale.
Requirements: Your agent keeps a list of buyers who have made contact with a specific set of requirements for their new home
As demand for spacious homes in rural areas increases, buyers want to get on an agent’s coveted list to be one of the first to get a viewing.
Joanna Cocking, head of country sales prime at Hamptons International, specialists in off-market sales, says: ‘Most of the sellers we work with don’t have to move, but they would be interested in an offer were it at a certain price.
‘They keep their properties off the market and wait for us to approach them when we find a buyer who fits the bill.’
Register with an agent and be interviewed.
Buyers should build a relationship with their agent and make their requirements and intentions clear, letting them know how ready they are to proceed.
Having the largest budget doesn’t necessarily put you in pole position. Being in the best position to proceed at speed is key. Sellers will often choose cash buyers where the deal can be done quickly even if the offer is slightly lower.
How to negotiate
Because off-market sellers are rarely in a position where they must move, and are happy to wait for the perfect offer, buyers may find negotiations tough.
The style of home may be unique or in short supply, so establishing the real market value, rather than the seller’s asking price, can be difficult. Properties often attract a premium because of their exclusivity.
While buyers don’t want to pay too much, haggling too hard could scupper the deal.
The trick, says Mr Wells, is for buyers to make it easy for sellers to deal with them. When called for a viewing, buyers should be available at a moment’s notice.
Some off-market agents will provide little more than a literary description of the property. A brochure is not always available.
When you’re ready to make a bid, be clear it will not be left on the table for long to stop the agent going down their list looking for a higher offer.