Hat tip to DOB for sending in this article about a realtor report that uses average and median sales prices, which aren’t the best ways to compare. But it did describe an attempt at an off-market sale:
The average single-family home in San Francisco sold for 17% more in 2013 if it was marketed on the city’s MLS rather than if it were sold “off market,” according to a new report. The percentage narrows a bit for condos, which sold for 9% more on the MLS. The same report also found that despite this gap, 11% of S.F. sales occurred off-market in 2013. When looking at only the top 100 high-end properties, the percentage of off-market sales almost doubled, to 20%.
“I’ve heard a lot of heated arguments [about off-market deals], but very little data,” said real-estate agent and report author Matt Fuller. “This was an attempt to add some data to the discussion instead of just yelling louder.”
As a director for the San Francisco Association of Realtors, which runs the SFARMLS, as well a co-chair of the SFMLS & Technology Committee, it would be easy to think that Fuller has a vested interest in proving the MLS’s worth.
But Fuller insists that he was not expecting to discover such a large gap between on and off market deals, even though his own recent experience selling a property at One Rincon Hill (pictured above) is in line with his report’s findings.
Fuller said that the one-bedroom on the 41st floor got an off-market offer of $980K. The seller decided to take it to market anyway, and after quickly receiving six offers (four of which were all-cash), it sold for $1.050 million.
But, Fuller also said that, for some clients, the privacy or convenience of selling off-market may outweigh the added financial benefits of going on the MLS.
“I’m not here to say selling off-market is good or bad,” he said. “But I want every one of my clients to be able to make an informed decision, understand the pros and cons of each approach, and make sure they understand the choice they are making.”
As for buyers, how can they track down these off-market deals? Fuller says he’s seen off-market transactions happen between landlords and tenants, or families quietly selling homes with deferred maintenance after the death of the elderly relative. Many off-market deals still involve an agent on one or both sides, he added.
As for 2014, despite the findings in his report, Fuller suspects we may see a small but discernible uptick in off-market sales. “My feeling is that the tight inventory in SF is driving people to search for properties everywhere and anywhere, so I am going to make an educated prediction that 2014 [off-market sales] will come in at somewhere between 10% and 15% of transactions.”