People wonder if they are missing opportunities – are there sales happening off the MLS?
Yes – there will always be sales closing that aren’t listed on the MLS. There are intra-family sales, tenants buying from landlords, for-sale-by-owners, and unscrupulous agents taking advantage of sellers.
How big is that segment?
A tax-roll review of SFRs closed since July 1, 2012 in Del Mar, Solana Beach, Rancho Santa Fe, Carmel Valley, Rancho Penasquitos and West RB (92014,92075,92067,92091,92130,92129,92127) showed the following:
There were 189 closed sales.
182 were listed on MLS, seven were not (3.7%).
Of the seven, one must have been a family sale, because the sale price was about half of the previous sales price in 2002. Another was purchased by a corporation that sounded like an investment group. (Occasionally people will call off the signs on the side of the freeway off-ramp and take the luring quick-cash offer!)
Why are more than 96% of the sales on the MLS?
Because sellers think this is their one shot to max out – and they want all the money. Virtually all sellers don’t have enough experience selling in this environment to feel comfortable doing it alone, so they hire the agent they think will get them top dollar.
The banks, builders, and flippers all list their properties on the MLS - and they are experienced enough that if there were a better way to accomplish top dollar, they would do it.
Other tidbits about the 189 closings:
REO listings: 8
Short sales: 19
Round-trippers: 12 (listing agent represented buyer too)
Open listings: 2 (listing agent provided MLS input only)
What does this mean for buyers? You need to hire an agent who has mastered the art of MLS sales. If there is an occasional sale that happens off the MLS, then make an arrangement with your buyer’s agent to take advantage of it.
This isn’t much of a distressed market in our area – expect that the top-quality houses (the ones that you want to buy) are going to be owned by sellers who go the traditional way. They will hire an agent who will list it on the MLS.
They might provide some challenges – like making it hard to see the property, putting it on a goofy price range, use lousy or no photos, etc. This is more reason to stick with a good agent to help with navigating the hurdles!
Why don’t more people just go direct to the listing agent? Because they find out quickly that there isn’t a better bargain going direct, because the sellers still want top dollar. Are there times where that is worth it? Maybe, and it happens 1-2 times a year that I tell my buyers to just go direct because the listing agent isn’t going to let anyone else in – to the detriment of his own client, the seller.
But as you can see above, there are two agents involved more than 90% of the time.