Have you ever heard of pocket listings or off market listings? It’s like a hidden listing in that it doesn’t appear on the MLS and isn’t as widely marketed as a standard listing; it’s more about relationship marketing. So, the issue is, why wouldn’t any seller desire maximum exposure when selling their home? Have you ever wondered why someone would sell a property off market rather than on the market?
That doesn’t make sense, and except for certain circumstances, it usually doesn’t. So, here are some of the reasons why off-market listings can benefit sellers:
1. Privacy Maybe it’s an executive or someone that doesn’t want to generate unwanted attention or doesn’t want the public knowing where they live. The disadvantage here is you probably won’t get a bidding war, so you’ll need transparent pricing, but you also won’t have the crowd through the door. I recently helped a CEO move his home in Atherton off market because he didn’t want to be in the limelight. We ended up selling to a Google executive, and it was a perfect private sale situation for both.
2. Testing the Market Sometimes sellers want to test the market without accumulating days on market. Its funny day on market has no direct relation to the quality and price of the home except that it affects the buyers’ perception of the home value if the days on market are much longer than the buyer’s expectations. For example, I just went to market on a property in San Francisco West Portal area that was listed as a coming soon at a higher price. We listed for a much lower price because we didn’t generate enough phone calls off market. Instead, we priced aggressively on MLS, generated multiple offers, and are currently ratified at a higher price than expected.
3. Avoid disturbing tenants, children or the elderly currently living in the listing Sometimes there are unique circumstances that result in off market being more beneficial of a strategy than just listing on MLS because it limits the number of showings required by only showing to qualified vetted buyers as compared to the rigorous showing schedule demanded with a regular listing. For example, I sold a home in the Richmond area of San Francisco that had an uncooperative tenant downstairs. We showed the property off market before the tenant moved out and were able to get a successful sale while the tenant was still occupying.
4. Timing Strategy at Play sometimes sellers know they are going to sell but are timing the market to get a higher price, so they are holding the listing off market to pursue their timing strategy. In the meantime, if they can get an offer like that of their expectations, they would be willing to entertain an off-market sale. We call this coming soon. Coming soon may choose to entertain offers if they will get what they want faster, why not!
Off market listings can be a good solution but it really depends on the property and the strategy. It is not always recommended but should be considered on a case-by-case basis.
In conclusion sellers, it might be a good solution and seem exciting and exclusive for you to list a property off market, but it’s important to realize the limitations of that strategy and that you understand if it meets the timeline and price point you need for the home you’re selling.
To discuss the right strategy for selling your home and investments in the San Francisco or Peninsula in the near future please reach out to us.
