Quick answer
Off-market property deals are often offered to buyers who can commit quickly, with short settlement periods and few conditions. A property-secured private loan provides the certainty of funds a vendor wants, secured over the property being bought, other property or both. It can be arranged without a valuation before approval and refinanced to a bank once the purchase has settled.
Key points
- Vendors trade price for speed and certainty in off-market deals
- A private loan lets you offer a short, unconditional settlement
- Security can include the purchase property and other property
- Refinance to a bank once ownership is settled
- Do your due diligence quickly but thoroughly
Why off-market deals reward speed
Many good properties never reach a public campaign. A landlord approaches a long-term tenant, an agent calls a short list of qualified buyers, a neighbouring business owner decides to sell to the business next door. These deals often come with a fair price, but the vendor wants something in return: certainty. That means a short settlement, few or no conditions, and confidence that the buyer can complete.
A buyer who has to say “subject to finance, eight to ten weeks” may lose the deal to one who can say “unconditional, four weeks”. A property-secured private loan lets you be the second buyer.
How the funding is structured
| Element | Typical approach |
|---|---|
| Purchase price | Private first mortgage over the property being bought |
| Deposit and costs | Equity from another property, or savings |
| Additional security | A home or investment property if the purchase LVR is too high on its own |
| Interest | Prepaid or added to the loan |
| Exit | Bank refinance after settlement, or sale of another asset |
No valuation is needed before approval. The property is assessed from comparable sales, title searches and, for commercial property, the lease position.
Due diligence on a short timeline
Moving quickly does not mean skipping checks. On an off-market deal, line up these items in the first few days:
- title search for ownership, mortgages, caveats, easements and covenants
- zoning and permitted use, especially for commercial and industrial property
- lease review if the property is tenanted
- building condition, ideally with an inspection
- GST treatment: is the sale a going concern, or is GST payable on the price?
- transfer duty payable to the state revenue office
Our guide on commercial property as security explains the factors lenders also look at, which overlap with good buyer due diligence.
Find out if you can offer the vendor a fast settlement before you negotiate.
Using the speed to negotiate
Certainty of funds is a negotiating tool. With a private loan lined up, you can offer the vendor a shorter settlement, fewer conditions or both, and use that to secure a better price or the deal itself. Factor the cost of the private loan into your offer: if the saving on price or the value of securing the property exceeds a few months of private funding, the numbers favour moving fast.
An illustrative off-market purchase
Illustrative only. A panel-beating business has leased its workshop for a decade. The owner, planning retirement, offers to sell it to the business off-market if they can settle within five weeks with no finance condition. The bank wants eight weeks and a valuation. A private first mortgage over the workshop, with a second mortgage over the owner-operator’s home for extra security, settles on time. Three months later the bank completes its process and refinances, repaying the private loan and releasing the home.
The exit and the term
Most off-market purchases funded privately are refinanced to a bank once settled. Set the term to cover the bank’s realistic timeline plus a buffer, using the exit strategy timeline. If the bank takes longer, the loan is flexible and can stay in place.
Risks to manage
- committing before checking zoning or lease terms
- underestimating duty and GST at settlement
- relying on a bank refinance without confirming the bank’s appetite for the property type
- not telling other property owners about the additional security
Off-market residential and investment property
The same approach works for residential and investment property bought for business purposes, such as a property for staff accommodation or a site next to the business’s premises. The key is a genuine business purpose and a clear exit.
Off-market deals between related parties
Sometimes an off-market purchase is between related parties: a director buying property from a family trust, a business buying the building from its founder, or partners restructuring ownership. These deals still need proper documentation, independent advice for each side, and attention to duty and tax consequences, which can differ when parties are related. A private lender will want to understand the relationship and see that the price reflects market evidence.
Preparing an offer the vendor trusts
A vendor choosing between buyers off-market wants evidence, not promises. A short letter from your solicitor confirming instructions, written confirmation that funding is being arranged on a secured basis, and a clear proposed settlement date can carry more weight than a slightly higher price from a buyer with conditions. Ask your specialist what written confirmation can be provided once the deal has been assessed.
When the property needs work
Off-market properties are sometimes sold because they need work the vendor does not want to undertake. A private lender assesses the property as it stands. If you plan to improve it, the improved value may support a better bank refinance later. Build the works period into the term, and keep enough funds aside for the works themselves.
Be the buyer the vendor chooses
In off-market deals, certainty wins. Tell us about the property, the price, the settlement terms the vendor wants and the security you can offer, and a specialist will tell you whether a private loan can meet them. There is no credit check when you first enquire, your enquiry is not sent to a panel of lenders, and accurate details help us respond within the timeframe the vendor expects. Ask about off-market funding.
Frequently asked questions
Why do off-market deals often have short settlements?
Vendors who sell off-market often want certainty and discretion. In exchange for a fair price without a public campaign, they look for a buyer who can settle quickly and without conditions.
Can a private loan fund an off-market commercial purchase?
Yes. A private first mortgage over the property, sometimes with additional security, can settle the purchase while a bank completes its process.
Should I still do due diligence?
Absolutely. Check title, zoning, leases, building condition and the GST and duty position before committing. Move fast, but do not skip steps.
How is the private loan repaid?
Usually by a bank refinance once the purchase has settled and the bank has completed its process, or by selling another property the buyer owns.
Prefer to start now? Enquire here
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