Growth of the grey market
Growth of the grey market
At the upper end of the market, there has always been ‘discreet’ marketing, withholding properties from the portals, or sometimes uploading a brief outline with little detail, a general but non-specific indication of location, and no pictures. Agents will contact suitable buyers on their list and aim to sell the property without ever going to the open market.
Nick Wooldridge of Stacks Property Search says, “A grey market forms when a property is particularly desirable. It’s a technique that’s as old as the hills but more important than ever, and in Covid times the market is growing. Vendors have many reasons for not wanting to make a big noise about their property coming onto the market; we now have one more reason to add to the list; vendors not wanting a stream of unqualified potential buyers viewing their property with the health risks that involves.
“Agents invite buyers on their lists, who they know the property is suitable for, to view. They will also invite buying agents. The grey market acts as a filter, ensuring that viewers are qualified in terms of finance, intent and readiness to progress.
“The post lockdown property market created a buying frenzy for some properties, especially those that were in rural areas with plenty of outside space. The most desirable were selling almost immediately they came onto the market.
“If you find yourself having to deal in the grey market as a buyer, you must understand what you’re entering into. Being given what amounts to a leg-up by the selling agent into inside knowledge of a market that is suffering from a shortage of supply tends to mean that there will be some level of buyers’ premium to be paid. It’s not a transparent market, establishing the correct market value can be difficult, and if you start haggling too hard about the price there’s a good chance there’s another buyer behind you in the queue who’s prepared to pay.
“Negotiating in a market where demand far exceeds supply is challenging, but equally you need to make sure you don’t pay too much. The trick is to make yourself look like a very attractive buyer – cashed up and sounding serious!
“First of all, you’ve got to make your way onto the list. Make your requirements and intentions clear to the agent, and make them aware of your proceedability – where the finance is coming from and who your professionals are. Proceedability is king, vendors will often choose a cash buyer where the deal can be done quickly even if the offer is slightly lower.
“If you get onto the list, and get a call to offer you a viewing, make yourself easily available to view at a moment’s notice, and follow all protocols to the letter. If there’s a limited viewing opportunity, go ready to buy, not expecting to be able to linger and go back for three or four visits.
“Do as much investigation into the property as you can independently of the agent. Do desktop research, get to the viewing early so you can walk around the environs and the outside of the property, so you know the questions you want to ask.
“When you make a bid make it on the understanding that you won’t be leaving the bid on the table, you expect a speedy response. You want them to avoid going on down the list and looking for a higher offer.
Stacks Property Search, 01594 842880 / www.stacks.co.uk
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For more information, jpgs and interviews, contact Amanda MacCaw, 01386 700068 / 07977 238175 / amanda@wildmaccaw.co.uk
