Exploring how property is Bought and Sold on the Northern Beaches of Sydney
For me there is no doubt that Sydney's Northern Beaches will always be a desired real estate market. Suburbs in the region have some of the most tightly held property with agent seeing the lowest stock levels in years.
NOW, if you are looking in to get into the beaches you will be exposed to the different ways that agents commonly employ to sell their listed property.
There are three primary property sales strategies: auction, private treaty, and off-market. The choice of selling strategy significantly impacts buyers' ability to successfully access and secure a property in the area.
What’s a private treaty?
Private treaty" refers to a selling method in which the seller, also referred to as the vendor, collaborates with the selling agent to determine the value and desired price for their property. The property is then publicly advertised, enabling potential buyers to inspect it, perform necessary research, and submit their offers.
In a private treaty sale, there is typically room for negotiation regarding both the price and the specific terms of the purchase. Additionally, this method often includes a cooling-off period, providing the buyer with an opportunity to withdraw from the transaction if needed.
I see lots of Auctions……
In an "auction," the vendor and selling agent establish a price range within which the vendor is willing to accept offers. Legally, this range or price guide is typically set around the midpoint of a 10% difference from the agreed sale price. For instance, if the agreed sale price is $2 million, the range would be set between $1,900,000 and $2,100,000.
The property is publicly advertised, allowing potential buyers to view it and conduct their due diligence. A specific date is scheduled for interested buyers to gather and engage in a competitive bidding process. Once bidding concludes and the vendor is satisfied with the highest bid, the property is considered sold. It's important to note that auctions generally do not include a cooling-off period, and the purchaser is legally obligated to proceed with the transaction.
What’s this OFF Market everyone talks about?
Off-Market: Off-market sales occur when a property is not publicly advertised. Instead, the agent discreetly matches the property with potential buyers from their network or database. This method provides a level of exclusivity and privacy, and it may offer opportunities for buyers to secure a property without competing against a larger pool of buyers.
Why do people use OFF Market strategies?
Maintaining privacy is often a significant consideration when opting for off-market sales. Certain clients prefer to keep their financial and personal matters confidential, avoiding the exposure of potentially hundreds of people inspecting their home on a weekly basis.
Another advantage is the reduction of pressure on the vendor. By avoiding public campaigns, such as auctions or extended periods on public websites during private treaty campaigns, the property can avoid developing any negative perceptions or stigma that may impact its true value. Some sellers prefer to steer clear of such pressure and would rather have the sale conducted discreetly, away from public scrutiny.
Additionally, off-market sales can be swift. In some cases, potential buyers are already pre-qualified either through the selling agent's database or by engaging buyer's agents who have previously visited the property. This streamlined process allows for efficient transactions to occur promptly.
Finally, there can be a cost saving to the vendor. Expenses like home make overs, styling and advertising are usually avoided when selling a home off market.
How can I find out about OFF Market Property on the Northern Beaches?
Engaging the services of a buyer's agent with a strong market presence is often the most effective and convenient approach. It is crucial to select a buyer's agent who operates in close proximity to the desired primary suburbs. This geographical proximity enables the agent to stay well-informed about the latest developments in the area and promptly notify potential buyers when suitable off-market properties become available.
Another strategy is to attend open houses of properties that align with your preferences. By registering your interest at these open houses, you can be added to the selling agent's database and await their call if a relevant property emerges. However, it's worth noting that once you are on a selling agent's database, you may receive a multitude of listings, information, and marketing materials that may not align with your specific needs or consume too much of your time to sift through.
Which selling strategy is currently preferred by vendors in the Northern Beaches?
In the current year of 2023, the favoured selling strategy on the Northern Beaches varies depending on the specific sector of the market.
In the higher-end segment of the market, a significant number of transactions occur off-market, with limited public awareness or exposure.
Regarding auctions, recent data from Domain indicates that there are currently 595 publicly advertised properties for sale on the Northern Beaches, out of which only 195 properties are mentioned to be part of an auction campaign. This data suggests that approximately one-third of properties are being sold through auctions.
In my experience, the preferred selling strategy depends on the type of property. For instance, family-friendly homes with 3 to 4 bedrooms and affordable price points are more likely to have a higher ratio of auction campaigns. This is because there is a larger pool of buyers in the market seeking such properties.
Notably, a significant number of entry-level homes on the Northern Beaches have recently been listed through auction campaigns.
Is it possible to purchase a home that is listed for auction prior to the scheduled auction day?
Under certain circumstances, it is possible to purchase a property listed for auction before the scheduled auction day. However, several factors come into play, influencing both the auction campaign and the vendor's decision.
For example, if the real estate market is experiencing volatility or if the property has been on the market for an extended period, the vendor may be more open to considering offers before the auction. Conversely, in cases such as deceased estates or properties with multiple beneficiaries, the auction process is often favoured to ensure transparency and fairness. Timing can also be a determining factor, as vendors may have deadlines or a desire to move on to other properties.
If you are interested in making a pre-auction offer, it is essential to communicate with the selling agent and assess their willingness to entertain such offers. Monitoring the level of interest in the property and gauging the likelihood of achieving a satisfactory result at auction can be helpful. However, keep in mind that the selling agent's primary responsibility is to obtain the best possible price for the vendor, and they may not disclose all offers or counteroffers received. It is advisable to seek independent advice, conduct thorough due diligence, and carefully evaluate the situation before making a pre-auction offer.
Final tips for buyers…….
If you're planning to purchase a property without the assistance of a buyer's agent, it is crucial to dedicate time and effort to researching the areas that interest you.
When you come across a property you like, take the opportunity to observe the activity surrounding it. Pay attention to the number of people entering and leaving the property, gauge their level of interest, and listen to the questions they ask. Spending some time in the vicinity allows you to gain insights and develop a better understanding of the property's position in the market.
It's important to note that the information provided by the selling agent may not always align with the reality of the market. To form an accurate assessment, it is necessary to build your own perspective. Buyers Agents are real estate professionals who invest their time in assessing and analysing properties to offer sound advice to their clients. Therefore, if you choose to navigate the property buying process independently, it becomes vital to gain a comprehensive understanding of the property market through thorough research and analysis.