We are talking about $10's of $1,000 of $'s if not more. The Seller could go on vacation for 4wks while their home is on the market and still come out WAY ahead financially... so I'll go out on a limb here and say, a Realtor with integrity will risk taking a strong stand with their client and counsel them to bring their home to market, in order to get market value. Of course, it's very tempting for most Realtors to get paid for a sale without bringing the home fully to market. Let's see... $30k commission 1 wk of effort? $31k commission 4wks of effort?
That why one of my least favorite tactics of many of the big name brokerages is having a tour of a new listing by their own brokerage and selling the home "in house" before it ever comes to market. WOW! What a great deal for the brokerage! They get paid twice as much because they represent the Buyer & the Seller. But in my opinion their client was sold short. Strange thing is I believe it's "spun" in such a way that the Seller is lead to think, "Wow! what a great brokerage! Look how fast they sold my home!". I say... malpractice. (Please, if you are a Realtor that disagrees with this, let's take that dialogue off line. Thanks)
The tromping still happens, however, since at least one buyer will still want to look before making an offer.
The reaons for off-market sales are many, but as a broker who deals primarily in properties sold by estates in probate or trusts, I do agree with Terri that many off-market sales take place between estates and a family member or a good friend of the deceased.
When a seller sells off-market it is actually harder for the listing agent, since the agent can't publicize and attract buyers as they normally would. It's 10 times harder to market a property quietly among a select group of brokers, attempting to keep the property out of the public eye, than it is to blast it to the world in technocolor.
There are many reasons why a home sells without putting it on the multiple listing service. However if either the buyer or seller doesn't have a lot of trust in their agent or know real estate prices as well as a top agent does, this can lead to a lot of problems. Realtors often announce upcoming listings to other realtors. If an agent intentionally keeps an upcoming listing secret to his office is he serving his sellers or his buddies?
Sometimes personal reasons can make it difficult for a home owner to fix up their home and get it ready for sale. If the seller can get a good price avoiding the preparation and marketing is worth selling at a somewhat lower price.
If a buyer knows a home is coming up for sale that is perfect for them, they may make a very strong offer before it is listed so that they can get the house they want.
The best price for both the seller and the buyer is reached by finding the buyer who really wants that house. If the house is not put on the MLS, this may not happen.
Good agents aren't desparate to work with anyone who says they might want to buy a house. They don't want to use their time helping a buyer who doesn't respect their time and effort. An agent will reach out first to the people who she feels will be most interested in having them buy that specific home. If you aren't commited to your agent or aren't after a very unique home, you won't be the best match in the agent's opinion to buy. If you aren't honest with your agent(s) they won't be able to best help you achieve your goals.
A buyer who values their own time will spend it looking for the house which is best for them rather than spending their effort to find anything that can be called a bargain. There are from time to time sales at very low prices but that is rare. I know of a home which was listed for sale by an out of area agent and sold withing two hours at a very low price. It was bought by a different real estate agent (I wasn't involved).
We have a lot of off market properties as we are the top selling agency in the area. Please feel free to contact me as one of your off market suppliers and I would be more than happy to help you find a home.
Alain Pinel Realtors
I know I cant have 2 brokers show me the same house. So would it be ok to tell a Coldwell agent...keep me in mind for any of your private listings, but I am working with another agent for the ones that make it to MLS?
I met an agent from a well known brokerage out on tour who had a list of "off market" properties in his car. He told me that they are selling a great deal of homes in house. He went on to boast about how much market share their office has, and how agents are now attracted to their office. By this statement I do not see a win-win for the clients. I see a big heavy weighted financial advantage to BIG broker in padding their coffers. I do not see this as fair trade.
This agent did tell me that I could come to their office each week to get the list. So really, what is the point of not marketing the house to the general brokerage/buyer community?
I too see another lawsuit in the future for this large brokerage.
Alain Pinel Realtors
I know this is happening in a lot of areas and keeping it in house raises the Broker's ranking, the agent may make some deal to the seller, but in my opinion they probably are leaving money on the table.
A seller may not want people to know they are selling and all the rest that goes into marketing a home. Some sales may be inter family and they would not go on the MLS either.
Have an amazing day!