Whether they’re called whisper listings, private exclusives or off-market properties, the idea that homes are sold without being advertised on a publicly available listing site naturally frustrates many buyers.
There are nuances to how they work and what they’re called depending on the market, but the common thread for buyers is that choosing a buyer’s agent with deep connections and a wide network of contacts ups the chances of finding and acquiring an elusive property.
“There are thousands of real estate agents in New York City, but when you narrow it down to full-time professional career agents, it comes down to a small world,” said Julia Hoagland, a real estate agent with Compass in New York. “We see the same brokers at training sessions and during deals, so we develop a tight relationship. The best thing a buyer who wants to know about off-market listings can do is hire an agent who has great connections with other agents and stays in touch with them.”
Real estate agents are careful to differentiate between “pocket listings,” which are against regulations for members of the National Association of Realtors, and are only marketed to one agent’s own clients, and off-market listings.
“Off-market listings or private exclusives are often properties that are being prepared to be listed on the MLS [Multiple Listing Service] but aren’t ready yet for public showings,” said Christie-Anne Weiss, an associate broker with TTR Sotheby’s International Realty in Washington, D.C. Until they’re ready to be shown, naturally they’re only known to agents within that agency and the clients they work with, she said. Another example of an off-market listing would be when sellers don’t want the public in their house, such as a celebrity or someone who just prefers privacy, said Weiss.
“If a seller asks an agent to keep their property off the MLS, the agent can only market that property within their own agency,” Weiss said. “If an agent from another company calls me and asks if I know of any listings in a particular neighborhood where their buyer is looking, then I’m allowed to say yes. I just can’t reach out to anyone unless they’re in my company.”
In the upper-bracket price range, as many as 50% to 75% of homes never go on the MLS, said Mark Bartikoski, a real estate agent with Re/Max Results in Eden Prairie, Minnesota.
“A lot of sellers don’t want open houses or strangers in their home, or they’re away and don’t want people to know it,” Bartikoski said. “We’re the western suburbs of Minneapolis version of Beverly Hills, where some homes sell for more than $20 million, but I’m still surprised at the number of homes sold off-market.”
One other reason a seller may not want their home on the market is that it could be a “quirky” or unusual property that could be hard to sell, said Hoagland. While normally that type of property would do better with more exposure, some sellers prefer not to have photos and information about their home online.
Finding a whisper listing
It’s nearly impossible for a buyer to find an off-market listing themselves unless they happen to hear of one from a neighbor, friend or colleague, Hoagland said. She recommended aligning yourself with a seasoned agent, or better yet, a team of agents who talk to a lot of other agents.
Bartikoski suggested choosing a buyer’s agent with experience in the upper price range if you’re looking for an off-market listing.
“Some companies work more often than others with more expensive properties, so buyers looking in that price range may want to choose an agent from a company known for selling homes in the neighborhood and price range they prefer,” he said.
Interview buyers’ agents and ask them about their network, especially if there’s an organized network of agents who handle upper bracket transactions, suggested Bartikoski.
“Referrals to an agent are great, but it’s also a good idea for buyers to read online reviews and ask other agents and buyers about the reputation of different agents to see how well respected they are,” Bartikoski said.
Buyers need to find an agent they can trust and who knows their market, Weiss said.
“Sign an exclusive buyer-broker agreement, and then the agent will work their network on your behalf to find properties that are not on the market,” Weiss said. “You need to hold your agent to a high standard and look for one who has a good track record.”
Positioning an offer to win a whisper listing
If you and your agent find a whisper listing, be prepared to make an offer immediately to avoid competing with other buyers who may hear about it, Bartikoski said. In a competitive area, that means offering the price the sellers are asking or slightly above, otherwise they may choose to take their home to the public market instead, he said.
Buyers need to be ready with all cash or with a full loan commitment as soon as they hear of a private exclusive from their agent, Weiss said.
“They need to have their earnest money deposit liquid and be ready to write an offer to present to the seller’s agent,” she said. “If you find a property that is truly a whisper listing, when the sellers have yet to decide whether they will put their house on the market, then you need to make an offer that incentivizes them to sell to you.”
When she represents the buyer interested in a whisper listing, Hoagland tries to talk with the listing agent to find out the seller’s motivation and how they came up with an asking price.
“That kind of information can be the one detail that makes a difference to maximize value for my clients,” she said.
Buyers can benefit if a home isn’t on the open market, Hoagland said.
“There’s no downside for buyers because they don’t have to face competition on a whisper listing,” she said. “If you’re the only person making an offer, then you don’t have to worry as much about offering the maximum possible price at the beginning. The negotiations are one-on-one with the seller because there’s a much lower probability of competition on a whisper listing.”
Article Source [www.realtor.com]
