Some Home Sellers Consider Private Listings to Avoid Crowds
Most home sellers like the idea of a crowd of people checking out their house in hopes that multiple offers will drive up the price. But for an increasing number of homeowners, private listings sent to a select few prospects are how they choose to sell.
A private listing is when the announcement of a home sale is sent to a select group of real estate agents instead of being advertised on the multiple listing service. This is a tactic typically used by sellers who want to protect their privacy and want to target the top buyers.
Private listings don’t typically draw crowds of buyers and, as a result, aren’t likely to generate multiple, competitive offers. But that’s OK with the sellers, who are typically trying to maintain a low profile for personal or professional reasons. It doesn’t mean a house won’t sell over asking price or that the seller won’t receive multiple offers. But in many cases, it’s more important to the seller to maintain privacy than boost profits.
If a private listing is something that interests you, consult with a real estate professional to discuss your options, including the alternative of listing home as coming soon. Here are some other things to consider.
How private listings work
Private listings are basically word-of-mouth listings that agents share with one another. Unlike private sales where a buyer and seller negotiate an agreement without a real estate professional, agents basically drive private listings. The agent arranges for the home to be photographed, staged and prepared for sale. Then the listing for the home created by the agent is distributed to local agents who are members of the Top Agent Network, which is a group of the top 10% of agents in 34 markets nationwide.
The listing also may be circulated internally within a selling agent’s firm to notify them that it’s available. An agent might also send personalized emails with details about the listing to a select few agents known as the most active in the area. An open house may be scheduled for a few brokers and agents to view the home.
Advantages of private listings
A private listing can help sellers test the value of their home to see if the market will support their top asking price. An agent can distribute a private listing and decide weeks later if there is no response that the asking price is too high. They can then decide to list the home on MLS at a lower price, knowing the original asking price didn’t attract interest.
By listing the home privately, the seller also avoids the “days on market” clock that calculates the time it takes from listing to sale. More expensive homes may sit unsold for a longer period of time because there are naturally fewer eligible buyers. A long period of days on market could discourage some buyers who fear a home didn’t sell because there is something wrong with it.
A private listing also can benefit a buyer, who may be willing to pay a premium for the home if it helps them avoid a bidding war.
Some agents prefer private listings for some sellers because it filters out the sight-seers who may not be serious about buying. They know potential buyers who inquire about the private listing are more than just curious.
Disadvantages of private listings
But some agents are not fans of private listings because they limit the pool of buyers, hurt diversity of the listings on the MLS and create a less organized sub-market for home sales. They argue that the public market is the proper place to list all homes because it follows a certain order and it is transparent.
Some agents believe sellers are unnecessarily limiting their profit potential because they have no idea how much buyers are willing to spend without advertising the home to a broader pool. For example, a private listing may price a home for $900,000, but that same home may draw an offer for $1 million if it is listed on MLS.
You should consult with a real estate professional to discuss the best options available to sell your home.
