The Off-Market Sale Is Giving Sellers Back Control
Luxury property sellers want to dictate the process and regain the sense of discretion and privacy that they have lost in these uncertain times.
Now more than ever it is the seller’s prerogative to market their home in whatever manner they see fit to safely, privately and effectively attract a buyer. Traditionally the thinking has been that in order to get the highest price for a home you would need the broadest exposure. However, in our current circumstances, broad exposure may invite unwanted results. The takeaway is that mass exposure is not necessarily productive exposure. With so many people attending open houses and traipsing through our clients’ homes and so much private information being shared with the public there has been a visceral reaction from the sellers of luxury property. They want to take back control, sell their home on their terms, and dictate the process to regain the sense of discretion and privacy that they have lost. Hence, the importance of off-market sales.
As we face a worldwide pandemic, we can certainly appreciate why our clients would want to market their homes privately. If you could sell your home for an acceptable price with reduced traffic coming in the house, no For Sale signs, no Sunday Open Houses, no nosy neighbors, why wouldn’t you? With the coronavirus outbreak it stands to reason that the private sale will be the preferred methodology to sell homes in our market. Who wants dozens of strangers in their home with their biases and opinions and, yes, germs, who are not really likely to buy it. The ever growing uncertainty in our world and the turbulent and divisive political atmosphere are sure to give sellers pause about the public marketing of their greatest financial asset, their home.
Forty percent of our business last year consisted of transactions that were sold off-market and if this is any indication of the market as a whole then CAR, BAERIS, SFAR really need to consider how they want to participate in this new normal. Traditionally the MLS has not supported the private sale because it runs contrary to their business model of an open market. We hope the MLS will modify their position to provide their clients, the agents, the buyers and the sellers control over how properties are marketed while taking into consideration these massive changes in our culture and our daily lives.
Are we heading for a perfect storm between the market’s desire for private sales and the MLS’s desire to minimize the private marketplace? The National Association of Realtors is currently in the process of trying to minimize the off-market phenomenon by restricting and penalizing the various off-market networks like Aalto, Compass Coming Soon and Top Agent Network. They are not thinking about the welfare or the interests of their clients who are shouting from the rooftops, “don’t tell me how I can and can’t sell my home.” Whether it’s the coronavirus or some other concern that a seller has about going on the MLS, shouldn’t they have the right to market their property how they see fit without some agency controlling how they do it? When a home is listed on the MLS the system tracks how many days it has been active and, with the outbreak, properties may take a lot longer to sell. The longer a property is on the market the less valuable it is. In this new world is days-on-market even a fair indicator of value when a property may stagnate because of unrelated factors such as a drastic turn in the stock market or a political upheaval or a health crisis. Why would you want that ticking clock around your neck if you didn’t have to have it?
The off-market trend was in full force prior to the covid-19 outbreak and now it is going to turbocharge the private market sale approach. The question is will the NAR, CAR and the local MLS stand in the way and try to obstruct this movement or will they adapt and find new ways to support their clients with new products and services that take into account the ever-evolving world we live in today?