Home Buying in Palo Alto>Question Details

P, Home Buyer in 94022

Homes that don't go on MLS for Palo Alto & Los Altos

Asked by P, 94022 Fri May 18, 2012

I'v notice a fair amount of homes show up as sold on Trulia or Redfin but never went on the market for sale. I know of two neighbors who bought their house this way. I understand that some sellers don't want to go through the hassle of staging and having strangers trample through their house. Is this the real reason, do private sales help the seller or buyer? In your view does the seller usually come out ahead b/c the buyer thinks they are getting a sneak preview and thus ends up paying a bit more? Does this help realtors keep transactions within their known circle? I have to believe it benefits someone otherwise no one would do it.

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The market is determining market value by voting with its' money. Therefore selling a home without bringing it to market is as unlikely to determine actual market value as voting for President of the USA, with only one vote and one candidate, is to determine who the people of the USA want in that office. Another way to answer your great question is.... when I represent a Buyer, and we can find a home and buy it before it comes to market, we will as fast as we can, and we know the last thing that would help US as the Buyer is the home going to market.

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)
1 vote Thank Flag Link Sat May 19, 2012
Selling isn't always about the bottom line for some sellers, as Gary accurately points out. Some are willing to trade limited exposure and fewer offers for privacy. They usually have enough $$$ in the bank that a few bucks (or $100,000+/-) doesn't matter to them. It's their decision and all agents can do is provide options for the seller to choose from.
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.
1 vote Thank Flag Link Fri May 18, 2012
Home buyers want to get a good deal. An agent can appeal to this desire by showing them homes that are not on the multiple listing service. If the listing agent is doing her job, the sales price won't be at her seller's expense.

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).

Web Reference: http://www.JulianaLee.com
0 votes Thank Flag Link Sun Jun 10, 2012
Yes, getting a relationship with a couple of different agents is one way to do it. Different agencies have different off market property. Just be clear with the agents so there is no confusion when it comes to making an offer as there is nothing worse than showing a client properties only to have them use another agent to write the offer. And don't use the other agent to feed one agent the information as that is not right either. This is our livelihood and playing fair is what we hope for in a client or else we are wasting valuable time to benefit another agent.

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.


Gary Kurtz
Alain Pinel Realtors
0 votes Thank Flag Link Mon May 28, 2012
Thanks for the great answers and info. As a buyer who wants to tap into this market how do you suggest I work.. Do I need to establish a relationship with a few brokers...from different brokerages so they can reach out to me if something comes up?

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?
0 votes Thank Flag Link Sun May 27, 2012
Stu, I agree with you.

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.
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Wed May 23, 2012
Stu, I understand what you are saying and there are agents out there who keep the listings to their in-house agents and I agree that is not right to do. It's not right to the seller or to the agents with active buyers who could have paid more. However, many of the agents I know in this area do market their off market listings to all agents at the various companies so their goal isn't to sell it in house. We send our exclusives out and I also get emails all the time that are sent from Coldwell Banker, Intero etc. marketing their off market properties. I guess the takeaway is that the seller of an off market property should ask their agent before listing with them if they are going to market it to other companies to keep the playing ground fair and get them the best price possible.

Gary Kurtz
Alain Pinel Realtors
0 votes Thank Flag Link Mon May 21, 2012
Stu, if you don't mind, I'm going to AGREE with you ONLINE. You make your point very well and it is accurate. The scenario you describe also exposes buyer and seller to the risks of dual agency, which occurs when agents working for buyer and seller both work for the same broker. This is legal, but in my opinion very bad for buyer and seller.
0 votes Thank Flag Link Sat May 19, 2012
Off market home sales are very prevalent in the areas of Menlo Park, Palo Alto and Atherton, and some surrounding areas, we do quite a bit. I would say that 30% of the business right now is "off market". Some sellers just want privacy while others are testing the market with their price while others just want serious buyers only to come thru their house. The real estate networking in this area is very strong and sellers know they will still get a fair price and possibly multiple offers as the agents they deal with are typically at the top companies and they have a large base of buyers. The properties are still marketed to the agents in the area, so there is still high demand for off market properties. We all have lists of the off market homes that are available and it keeps agents working hard to make sure they are up to speed with the best homes available for their buyers. You could argue that the surge in off market homes could be that so much information has become available on the online sites and the off market listings bring value back to the real estate agents as buyers need to work with an agent to get the most up to date information.
0 votes Thank Flag Link Fri May 18, 2012
I don't believe it benefits the Seller at all. When a property is not exposed to the buyers the Seller is loosing out on potential multiple offers.

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.

Good question!

Have an amazing day!
Web Reference: http://www.terrivellios.com
0 votes Thank Flag Link Fri May 18, 2012
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