Property owners who sold their homes off-market ended up losing around $30,000 on average.
The latest PropTrack report, which covered sales in 2019 and 2020, showed that homes not listed or advertised sold 2.6% less compared to those listed online.
PropTrack economist Paul Ryan said selling off-market should be seen with caution as it could come with a significant cost.
“While some sellers might be trying to save money by not advertising online, the potential earnings lost in the final sale price are estimated to far outweigh the initial cost of advertising, on average,” Mr Ryan said.
According to the report, sellers in NSW, Victoria, and the ACT were worse off when choosing to sell off-market relative to other states.
For instance, houses sold off-market achieved prices that are 2.7% lower in Sydney and 4% less in Melbourne and the ACT.
Overall, these losses equate to $30,000 on average.
“Sellers and agents both want to achieve the highest sale price possible, and we know that creating competition is the best way to accomplish that,” Mr Ryan said.
Off-market sales in affordable locations with median prices between $250,000 and $500,000 perform the worst, with prices ending up 3.7% lower.
“The evidence shows advertising online draws a bigger audience, increased competition and a larger sale price,” Mr Ryan said.
Advertising pays off
Typically, property owners choose to sell properties off-market to test interest and demand in the property without incurring fees.
Ray White TNG director Shiv Nair said selling off-market is an important discussion in the current market climate.
“Today’s strong market conditions with high buyer demand is more of a reason to invest in marketing so you can truly extract the highest possible sale price,” Mr Nair said.
“Why sell with minimal buyer competition? If you are a seller whose main focus is maximising the sale price of your home, then my recommendation is to invest in marketing.”
Mr Nair said advertising could boost the price of the property by as much as $100,000 within a week.
“I advised my sellers to list on the market because I believed there was a higher price achievable.
“With the power of online marketing, we are able to attract the maximum level of interest and attention, therefore creating the highest amount of buyer competition, which will result in a premium price for the seller.”
Photo by Tierra Mallorca on Unsplash.
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