Edinburgh Property Market
We are constantly hearing about the performance of the Edinburgh property market, especially in relation to the shortage of properties pushing up sales prices. However, many landlords and property owners are surprised to hear that there are also benefits to selling a property off-market.
What is an off-market property sale?
Off-market is the term used to describe selling a property without advertising it on the open market. This method is commonly used for high profile, high-value sales – where the seller does not want to publicly advertise the property – but is also a way for landlords to sell their property on to another investor. Below are 4 reasons to consider selling your Edinburgh property off-market.
1. Minimal void periods
As all landlords know, an empty property very quickly becomes an expensive property. If you have tenants living in your property, most selling agents will recommend serving notice to end the tenancy before marketing the property for sale. The reason for this is that, is most cases, the property will show better once the tenants have moved out to allow for a professional clean and any required maintenance work to be done before the marketing photographs are taken. Marketing a vacant property also permits for viewings to take place without causing upheaval to tenants. The downside to this, of course, is that there will be no rent coming in, and the property owner will have to cover all other costs associated with the property such as mortgage payments, council tax and utility bills. If the property fails to sell, these costs can mount up quickly.
For off-market sales, the property details can be sent to potential buyers straight away, without giving notice to the tenants. There is no need for tenants to move out until the sale completes – or at all if the buyer wishes to continue with the tenancy – so landlords selling off-market don’t have to worry about covering the costs during lengthy void periods.
2. Save on selling costs
In addition to avoiding costly void periods, you will also save on marketing costs when selling off-market. To sell a property on the open market, you will require professional photographs and floorplan, a Home Report and printed (or digital) sales schedules. These services cost hundreds of pounds and can take weeks to arrange and prepare the property, delaying the sale.
For off-market sales, you do not require any of the above marketing materials. When selling off-market, we generally take photographs in-house, using a professional spec camera, and send the images directly to our investor list via email. Home Reports are only required when a property is advertised for sale.
3. A clear selling price
When selling on the open-market, your property will most likely be marketed as ‘offers over’ or ‘fixed price’, both of which provide a wide scope for variation in the actual sales price achieved. Just under 85% of properties in East Central Scotland were marketed as ‘offers over’ in November 2018 [Source: ESPC]. Marketing a property as ‘offers over’ can push up the sales price if there is interest from multiple buyers – one of the main reasons sellers choose to sell on the open-market – however, the average selling price achieved in East Central Scotland in November 2018 was just 4% above the Home Report valuation [Source: ESPC]. This serves as a reminder that ‘offers over’ does not necessarily guarantee a high sales price. Similarly, selling off-market does not mean accepting a lower offer; property investors know that they will have to offer a fair price to secure a good opportunity.
If you have a particular price in mind that you want to achieve, selling off-market can be a good opportunity to test the market. You are under no obligation to sell if you don’t get an offer that you are happy with, and you won’t have lost your tenants or wasted funds on advertising.
4. Secure a quick sale
On the open-market it tends to take 2 – 4 weeks between advertising the property and setting a closing date or accepting an offer; the current average is 21 days for East Central Scotland [Source: ESPC]. You then have to accommodate viewings, usually a weekly open viewing plus ad-hoc appointments as required.
Another benefit of selling off-market is that the property details are circulated with ‘warm’ buyers, who we will only approach if we know your property matches their search criteria. These buyers are actively looking for a property to purchase and are ready to move quickly when the right opportunity comes along. This targeted method saves the seller preparing the property for multiple viewings. As property investors, off-market sales also tend to be to cash buyers, minimising the worry of the sale falling through.
The decision to sell your property on or off-market is a personal one and can be dependent on your reasons for selling and the property itself. Selling on the open-market works well for many sellers who want to expose their property to as many buyers as possible and maximise their sales price – we have all heard of properties in Edinburgh selling massively over the offers over price, especially during peak season. Some buyers, however, should not dismiss selling off-market without first weighing up the benefits of each method. Off-market sales can be faster, have less uncertainty and avoid many of the mounting costs that come with selling on the open market.
As Edinburgh’s premier letting agent, we have a growing database of property investors looking for properties to let in Edinburgh. We offer our landlords complete peace of mind that their obligations are covered by delivering an exemplary property management service. Our team of qualified property management professionals deliver a comprehensive service and Clan Gordon is among just a handful of agencies in Edinburgh with in-house chartered surveyors.
Interested in selling your Edinburgh property off-market? Schedule a call today. We can help put you in touch with potential buyers.