Manage episode 299713997 series 1248803
[Speaker] Kathy Fettke
Doing an office exclusive on your home may not get you top dollar. There’s a new study that shows homes listed on the MLS sell for substantially more than those that are sold off the MLS.
Hi I’m Kathy Fettke and this is Real Estate News for Investors. Thanks for joining me and don’t forget to hit the subscribe button for our podcast.
We recently did a podcast on private listings, which are also known as pocket or whisper listings, because they seem to be growing more popular. It covered the pros and cons of keeping your home off the MLS for both buyers, sellers, and brokers.
While some sellers like to sell privately to keep their identities, situations, or belongings private, it’s really the brokers who benefit. By selling privately, the broker may share the information, and the commission, with another broker, But in many cases, the seller’s broker will earn the entire buyer/seller commission. Private listings impact buyers also because they might not be aware that these homes are for sale.
So what does this new study tell us? It found that homes listed on the MLS sell faster and have a median sale price that is 17% higher than homes sold privately. (1)
And 17% is significant. The median price for listed homes is $310,000 and just $265,000 for unlisted homes. That’s a $45,000 difference.
The study was done by Bright MLS and covers an area along the mid-Atlantic area from Pennsylvania to Virginia. It included data from more than 442,000 home sales in a two-year period from January 2019 to December 2020.
Bright also broke the study down by home size and found that mid-sized homes with 12 to 16-hundred square feet sold for almost 27% more if they were listed. Slightly larger homes up to 2150 square feet had a 12% advantage on the MLS.
Why Are Sellers Going Private?
The Bright report says that some sellers believe that demand is so high, they don’t need the MLS to get the highest price for their properties. According to this study, that’s not true.
CEO Brian Donnelley says: “We have always known the power of the MLS network, and past studies have shown that homes shared cooperatively on the MLS sold for more. We’re proud to confirm without extensive data that promoting homes through our MLS delivers significant value over other methods.” (2)
Private Sale Methods
There are several methods for selling a home without the MLS or a broker’s help including “For Sale by Owner” which is abbreviated FSBO. The seller is the one that does the advertising and the legwork, without any help from an agent.
There’s also the iBuyer method which involves a real estate investing company that will make cash offers on homes so sellers can move quickly on buying another home. The iBuyer may do a few improvements and then resell the home.
Office exclusives are the ones we’ve been talking about when a seller makes an arrangement with a brokerage to sell the home without any public advertising or MLS listing. It’s only marketed by that broker.
Getting Your Home Sold Fast
The Bright report says that office exclusives don’t work well for many sellers. It says that office exclusives take a combined average of 31 days to go under contract while those on the MLS take 11. And, it found that 63% of the office exclusives wind up on the MLS.
Real estate economist Elliot Eisenberg was also part of the study. He says: “There’s a perception that selling outside the multiple listing service, either with an agent or as a For Sale By Owner, can save time and money for the consumer. “ He says the study clearly shows otherwise for getting both top dollar, and a fast sale.
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Thanks for listening. I'm Kathy Fettke.