Mara Girone spent two years trying to find the right property in London.
In many ways, she was an ideal buyer; she had a generous budget (£2million), was ready to move out immediately and was quite flexible with what she wanted from her next home.
She was still struggling to find anything and so, exasperated, she turned to a buying agent.
Options open: Mara Girone in her South Hampstead flat which she bought on the ‘secret’ property market
Suddenly Mara’s world opened up. Buyers have access to homes that have not been listed on the open real estate market.
This is because they operate within a “secret” network that connects buyers and sellers before “For Sale” signs appear.
Mara, 46, who runs her own fashion label, Simple Sophistication, says: “My husband always says hiring an agent was the best investment we ever made.”
Within months, the couple and their two children had swapped over their dream home – a spacious four-bedroom apartment in South Hampstead.
Buying off-market is nothing new and has long been a route taken by the UK’s wealthiest.
But, recently, the so-called “secret” market has become more mainstream, mainly due to fierce competition in more traditional and open channels.
A record 135,730 homes were sold off the market last year, according to data from the Hamptons real estate agency. This is a 60% increase over the previous year.
In December 2021, one in ten homes was sold off the market. In London, that figure has risen to one in five. And the trend is by no means limited to the capital, as rural areas such as the Cotswolds are increasingly in demand.
Experts from specialist agency The Buying Solution say the percentage of country houses on their books selling off-market is now “significantly higher than usual”.
Still, it seems like a curious way of doing business. Why would someone hoping to sell their home want to keep it a secret?
There are several motivations for doing so. First and foremost, sellers may seek to price test their property.
Hamptons research analyst David Fell says: “An agent will have a black book of his engaged buyers and he will test prices on them. These type of buyers in the market will usually pay a small premium.
If a seller were to list their home directly on sites such as RightMove and Zoopla, there would be a digital footprint of the previously advertised amount and price drop.
Additionally, many sellers choose to turn to the secret market for privacy reasons. This is often because they are very prominent or extremely wealthy people.
London buying agent Sophie Bonsor says: “Sometimes people selling in this market have art collections that are worth more than the property. They don’t want a lot of strangers to come into their house. But experts have also noticed that more and more ordinary sellers are wary of nosy neighbors.
Mr Fell said: ‘People don’t want their neighbors to find their property on Zoopla and can see how much it costs.
Similarly, Ms Bonsor says, “It’s a seller’s market by the minute due to the lack of stock. Why would they want to overexpose themselves when they don’t have to?
Indeed, the real estate market for much of the past year has been weighted in favor of the seller. Stamp duty tax relief, along with a demand for more space, has driven prices to record highs in 2021.
And 2022 saw the housing market get its best start to a year in 17 years, with prices 11.2% higher than a year ago, according to Nationwide.
Although demand has never been higher – buyer inquiries in January were more than 20% higher than pre-Covid levels, according to property portal RightMove – supply is non-existent.
For much of the past year, the real estate market has been weighted in favor of the seller. Stamp duty tax relief, along with a demand for more space, has driven prices to record highs
There were just 350,980 homes for sale at the start of this year, according to consultancy TwentyCi, 36% less than in 2020 and the lowest figure since the company started collecting data in 2008.
Sellers therefore know that they are in a strong position to negotiate: they can be selective about who they present their property to and ambitious with their asking prices.
But will buyers be burned? Buying a home is already an expensive affair, with high conveyance fees and legal fees.
So hiring a buying agent – who charges an average of 1-3% of the purchase price – only adds to the expense.
On top of that, homes sold off the market typically attract their own premium, costing more money than they would on the open market.
So you might assume the trend won’t go beyond London’s elite – but former agent Mark Wells disputes that. His project, Invisible Homes, attempts to digitize off-market space.
The site asks buyers to complete a questionnaire that will determine what they are looking for and their level of commitment to moving. It then matches the buyer with a host of exclusive properties not available anywhere else.
There is a wider range of properties available there, with prices starting at £200,000 and reaching into the tens of millions of pounds.
“We place so much emphasis on personalization in the modern world,” says Wells. “We expect our computers to tailor ads to show us what we actually want. That’s all I’m trying to do: make it easier to match properties with serious buyers.
But is it really a trend made to last? When the market calms down and supply increases, will back-end offers still be as attractive to buyers?
Mr. Wells seems to think so. He says: “We are only focusing on London properties at the minute, but we will be moving to the rest of the country very soon.
“I don’t think we’ll ever reach a point where the free market doesn’t exist at all. But I think more and more sellers will look for off-market deals first.