Overheard at a packed open house: “I want to make an offer on a home that isn’t on the market. That way I can judge the value of the home for myself.”
In other words: “I want the seller all to myself, so I have the leverage.”
Sure you do, but it doesn’t work that way. In this market, you’re never a seller’s only option. And how anyone could jammed against a wall by a seething mass of buyer humanity at an open house and not instinctively understand this is beyond me, but it’s the kind of misreading of markets, even by bright accomplished people, that guarantees agent full employment.
First of all, a house that’s off the Multiple Listing Service isn’t “off the market”. It’s on the market, just off the MLS. Word of its availability gets around, either because the listing agent wants it to or despite the listing agent’s fervent desire that it not. A market with this much momentum is going to barge in uninvited.
Last year I sold a single-family home in Palo Alto before it reached the MLS, not because I wanted to–I thought my client would do better exposing it on the MLS–but because a friend told a friend told some clients, and I immediately had not one but two offers so good that the seller probably would have lost money turning them down and fixing the home to put it on the market.
Multiple offers on off-MLS homes are not uncommon. Early last year I had clients interested in a home in North Los Altos that was pre-MLS. It was blessed with a great location, but tired and expanded without permits. My clients begged off and eventually got way more house in Saratoga for the same money, but the Los Altos home sold with three offers for what I thought it would have fetched had it made it to the MLS.
Back a seller into a corner? There are no bargains off the MLS, unless you’re willing to knock on doors and rob unsuspecting widows and orphans. In fact, most of the listing agents I’ve dealt with–and I’ve taken the same position when I have a listing–is that if anyone wants to buy off MLS, they should be prepared to pay a premium. Because the seller is taking a risk by foregoing the near-certainty of competing offers, and needs to be compensated for that risk.
It’s just Markets 101.
copyright © John Fyten 2018