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<\/a>The Multiple Listing Service Is The Only Way To Get Full Value For A Seller<\/h2>\nAs I wrote last year today’s victims of secret or private sales are homeowners that are letting their property be marketed at least 10% under real market value. \u00a0Dishonest or \u201cless than honest\u201d brokers\/agents who are playing coy first gain the sellers’ confidence then encourage them that it would be most effective to keep their property off the Multiple List Service (“MLS”); to maintain personal privacy and stay away from potential fraud; and limit the inconvenience that comes with marketing one’s home like signage, broker tours, lock-boxes, etc. \u00a0The claim that some brokers and agents are using to convince sellers to have a \u201cprivate\u201d or \u201cpocket\u201d listing\/sale is to guarantee buyers to their clients. However, in a lot of instances those guaranteed buyers are coming from the broker\u2019s and agent\u2019s own offices or circles of close net friends which dramatically reduces exposure to the marketplace, but allows for the brokers and agents to possibly double-end the transaction, or \u201ckeep the whole deal in the office.\u201d\u00a0 This practice is a violation of Department of Real Estate rules and is an ethical violation as well.<\/p>\n
Sellers That Acquiesce And Don\u2019t Place Their Home On The Market Leave Substantial Money On The Table<\/h2>\n
What brokers\/agents also fail to tell naive sellers is that exposing the property on the MLS places the property in front of over 14,700 local networked broker and agent members, all of whom then have the possibility to work with the property.\u00a0 Limiting exposure to the MLS is by definition limiting the marketability of the property to the maximum potential \u2013 and is what should always be done.\u00a0 As always these \u201cprivate\u201d or \u201cpocket\u201d listings are common when the real estate market heats up and there is limited inventory.<\/p>\n
In 2012, it is estimated that in Santa Clara county residential properties on the MLS sold for 13% more than \u201cprivate\u201d or “pocket” or \u201coff-market\u201d listings.\u00a0 That is a lot of money.<\/p>\n
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<\/a>Brokers\/Agents Breach Their Fiduciary Duties To Sellers More Often Than You Think – Unfortunately<\/h2>\nIt is a violation of a listing broker’s fiduciary duty to the seller to keep the home off the MLS unless the homeowner, after being fully and faithfully informed, has a legitimate reason for not marketing the property to all brokers and agents in the MLS.\u00a0 In my experience homeowners are almost never \u2018fully-informed\u2019 in accordance with the law because it would be almost impossible for anyone to be able to tell a seller precisely what their home was worth UNLESS they exposed it to the entire marketplace.\u00a0 Anything short of an explanation detailing the precise sales price would be less than \u201cfull information.\u201d\u00a0 This is the primary reason people put their homes on the Multiple Listing Service.<\/p>\n
Maximum Exposure To The Maximum Audience Is The Best Practice<\/h2>\n
It is always in a seller’s best interest to have a massive advertising of a home, which encourages and promotes bidding wars and greater sales prices. Sellers who are convinced to have an \u201coff-market\u201d listing probably do not recognize the advantages of placing their home on the MLS, so they acquiesce and go along with their broker or agent\u2019s recommendation based on guarantees from their broker\/agent that they will get either equally as good a sale price by doing so; all without the hassles of signs, tours, brochures, lock-boxes, etc.<\/p>\n
More importantly, an agent who convinces a seller to keep the home \u201coff-market\u201d doesn\u2019t have to do any marketing, doesn\u2019t have to print any brochures, doesn\u2019t have to prepare any social media, and doesn\u2019t have to hold any open houses.\u00a0 The reason for this is because they already have a buyer sitting in their office (usually from a team member or someone who will pay the agent a referral fee on top of the listing agreement fee they are getting from the seller).\u00a0 To make things worse, the listing agent doesn\u2019t tell the seller this \u2013 only tells the seller that there are buyers looking for their particular neighborhood.\u00a0 So the listing agent makes more money, doesn\u2019t do any traditional marketing work, and the seller gets significantly less money for their home.\u00a0 Who loses in this situation?<\/p>\n
If A![\"Pocket](\"https:\/\/shellyrobersonrealtor.com\/wp-content\/uploads\/2015\/03\/Pocket-Listing-Lips.jpg\")
<\/a> Seller Is Considering A Pocket-Listing Please Get Three (3) More Informed Opinions And Speak With A Real Estate Attorney Before Moving Forward<\/h2>\nBroker and agents have the duty to exercise care, integrity, fair-dealing, and loyalty for their customers. \u00a0This task consists of performing their best possible acts and conduct to acquire the greatest sales price for the home.\u00a0 Recommending \u201cprivate\u201d or \u201cpocket\u201d listings is typically NOT in a seller\u2019s best interests.\u00a0 There are however exceptions or rare occasions where these type sales make sense for sellers, but they are extremely rare; not 10-15% of the active marketplace.<\/p>\n
It is estimated that as the local real estate market began warming back up, exclusions from the MLS raised considerably, almost doubling for the first quarter of 2013 as compared to the same timeframe in previous years. \u00a0In 2012, homes not put on the MLS amounted to approximately 15 % of the market or $340 billion in sales volume.\u00a0 Incredibly, at a conservative 10 % decrease in fair market value (due to private or off-market listings), that would equate to $340 million in potential lost seller net proceeds \u2013 all \u201ccloaked\u201d in the name of privacy and\/or hassle free transactions.<\/p>\n
<\/a> Seller Is Considering A Pocket-Listing Please Get Three (3) More Informed Opinions And Speak With A Real Estate Attorney Before Moving Forward<\/h2>\nBroker and agents have the duty to exercise care, integrity, fair-dealing, and loyalty for their customers. \u00a0This task consists of performing their best possible acts and conduct to acquire the greatest sales price for the home.\u00a0 Recommending \u201cprivate\u201d or \u201cpocket\u201d listings is typically NOT in a seller\u2019s best interests.\u00a0 There are however exceptions or rare occasions where these type sales make sense for sellers, but they are extremely rare; not 10-15% of the active marketplace.<\/p>\n
It is estimated that as the local real estate market began warming back up, exclusions from the MLS raised considerably, almost doubling for the first quarter of 2013 as compared to the same timeframe in previous years. \u00a0In 2012, homes not put on the MLS amounted to approximately 15 % of the market or $340 billion in sales volume.\u00a0 Incredibly, at a conservative 10 % decrease in fair market value (due to private or off-market listings), that would equate to $340 million in potential lost seller net proceeds \u2013 all \u201ccloaked\u201d in the name of privacy and\/or hassle free transactions.<\/p>\n