Many Realtors will tell you “list your home with me I have a buyer” and I’m sure they do. The fact of the matter is “we all have buyers”. Another fact is that most of the time it isn’t the “listing agent” that sells your home it’s the “buyers agent”.
The real estate market is once again changing, what once was a market filled with bank owned and short sale properties, has now become a real estate market filled with more “equity” or as you may know them “standard” sale properties. This is great news, no, this is fantastic news, because now as a seller you have the power. The power to sell your property to the buyer that is willing to pay you “what you feel your home is worth”!
There is one catch to this, you MUST hire a Realtor that is willing to work hard at marketing your home to the most buyers, so that you find them. An agent that walks in with a buyer ready to go is not working hard to give you, the seller, that opportunity. Unless you are in a position to where you need to sell your home fast and quietly or it is a short sale and you would just rather not have potential buyers constantly coming and going being insensitive to the fact you are losing your home, there is no true benefit to you.
What this Realtor is really saying is “I’m not going to tell anyone your home is for sale, so I can make both commissions”. Therefore, your home is not put on the Multiple Listing Service (MLS) which offers the advantage of being actively marketed to every real estate agent who belongs to that MLS and, through those agents, to their vast network of potential buyers looking to make an offer to purchase the property. Active marketing on the MLS also generally includes open houses, broker tours and when your property is in the MLS’s, it downloads to various real estate Internet sites commonly used to search for properties.
I want to make it clear that this practice is not illegal if the listing agent fully discloses the pros and cons to you, the seller. Additionally, that the Realtor follows the rules that are designed to protect, you, the consumer. Nevertheless, many real estate professionals believe that off-MLS listings may not be in the best interest of sellers, particularly if a seller does not know about the benefits of marketing his or her property through the MLS. To keep a listing off the MLS, a listing agent who is a participant of an MLS is required, under the rules of most California MLSs, to obtain a signed certification from the seller that he or she does not wish to sell their property via the MLS. So, that brings me to asking the question, “If a property is exposed to fewer potential buyers with an off-MLS listing, why would you agree to one? Pocket listings, as we refer to them, sometimes are requested by celebrities for example or others in high profile positions who wish to maintain their privacy.
The biggest negative to this practice that I can see is what makes a “sellers market” so awesome for sellers and that is the pool of agents and potential home buyers who will know the property is for sale and make an offer. This could significantly reduce the potential for multiple offers above the asking price, which is a frequent occurrence in today’s competitive market. Thus, you, the seller now have fewer offers and may not be getting the best possible price for your home.
The following is a list of things you can do and ask of the listing agent who suggests an off-MLS listing or walks in with an offer expecting you to not only list it with them, but to accept their buyers offer as the absolute best you will receive:
1. Home sellers should ask their agent about the pros and cons of selling their home off-MLS. The pros are that the listing remains private if sellers wish to maintain privacy. The cons are that their home is unlikely to be exposed to the full population of potential buyers, which likely may decrease the chance a seller will obtain the highest and best price for his or her property.
2. A listing agent may ask his or her seller to sign a standard seller exclusion form (Seller Instruction to Exclude Listing from the MLS or C.A.R.’s SEL form). Sellers should be sure they fully understand what they are signing and the possible adverse consequences outlined in the form of not listing their property on the MLS.
3. Sellers should ask their agent to show their home and present all offers from both inside and outside his or her network. This may increase the chances of obtaining a more accurate selling price and could help avoid any potential for violations of fair housing laws.
As I always say,” hire a knowledgeable REALTOR®” whether you are considering buying or selling a home.