Reasons for selling a flat "off market"

Question

An agent (from Martyn Gerrard) has shown to me a flat that is not yet on the market. He said that the owner wants first to try (say for a couple of weeks) to sell this off the market, but then if this doesn't work, they will advertise it (on Rightmove). I asked the agent, what is the point for doing this - indeed if you advertise, you will get more viewings, and maybe will find a buyer who is ready to pay more. He told me that the reason is that some people don't want to "put their properties on the market". Moreover, apparently, in his agency half of properties are sold like this.

I wonder if, in reality, there is some other explanation. For example, they don't want to pay for advertising the property on Rightmove.

The question that bothers me a bit more is the following: can I trust the agent that the price that he gave me is the one that they will eventually use if they advertise it on Rightmove? Or could the price that he told me be higher? (incidentally, the price that he gave me was 15K more than the maximum that I gave him - originally I was interested in a different cheaper flat that they were advertising)

Answer 1

First point: as a buyer, do not assume that anything an estate agent tells you is true. If he tells you the sky is blue, go and check outside for yourself. He is not working for you / paid by you, he is working for and paid by the seller of the property, so he will say whatever it takes to hook you in, and as long as he is not materially misrepresenting facts about the property (eg telling you it's got 4 bedrooms when it actually has 3) that is perfectly normal. This is not to disparage estate agents specifically - you should apply similar scepticism to anything you are told by any professional who is being paid by someone else to interact with you.

Second point: yes, some people do sell their property "off-market" but in my understanding typically this is extremely high end property and genuinely done privately: I tell the estate agent I am looking for a house like ABCD, you tell the estate agent you have a house to sell like ABCE, the estate agent tells me about your house to see if I would want it. If you look on the estate agent's website you would not see the property listed, if it is truly "off-market" (or it might be listed but with only the barest detail, "Price on application" etc.) Sometimes in this scenario you might not even have been interested in selling your house, but the estate agent knew that your house would fit my criteria and so contacted you to see if you would be interested in selling. It's basically a way for people to maintain a bit more privacy when they are selling their house.

Looking at the Martyn Gerrard website they have a number of properties listed as "sold off-market" and I think by this all they mean is that they haven't put it on Rightmove etc. Not what most people would consider "off-market", perhaps? Maybe the term is changing to mean something a bit different. Anyway, I don't think you should let the fact that something is "off-market" put you off in particular, it doesn't really make any significant difference to you where/whether it's been advertised - you still have to do the same amount of due diligence.

Third point: it is extremely typical for estate agents to offer you properties that are a small amount above your stated maximum price limit. This is because they know both that people tend to be cautious when saying what they can afford, and that people will get emotionally attached to a property and end up paying more than they originally intended to. Full disclosure, I did this in both properties that I have bought despite knowing this factor up front, so I'm not saying it's some great moral failing to fall into this trap. It's up to you to decide how rigorously you want / need to stick to your originally stated budget or how much flexibility you have, and if you don't have that flexibility then tell the agent that.

Final point: the price of a property can change at any time, up or down, whether it's on Rightmove or not. Until you've signed on the dotted line they are always free to ask for more (and you are free to say no and stick to your original offer) and if they're not getting enough interest in the property then they might drop the asking price. So it could go on Rightmove at any price at all, higher or lower than what you have been told.

Answer 2

I want to add a paragraph to Vicky's answer. My guess now is that in my specific case the agent's trick was the following: he was showing for a short while this flat to people together with other flats, but then he had an additional lever. When we started to negotiate the price and he saw that I am offering below what the seller was ready to accept, he told me that if I am not ready to go a bit higher he will advertise the flat. Since I was really interested in the flat, I decided to go a bit higher (the whole negotiating process took 2 days). So, surprisingly, by merely withholding the advertisement of the flat you get a lever over a potential buyer. I find it quite smart :)