Pocket listings should keep the excitement level higher for now.
From the Business Insider:
The ultra-wealthy are known for being exclusive, and the way they handle the purchases and sales of their multimillion-dollar homes is often no exception.
Now, that’s not to say the market hasn’t seen some very prominent, top-level listings. There’s the most expensive home for sale in the Hamptons, which is listed at $150 million, and, of course, Los Angeles’ Chartwell Estate, which was listed at $245 million and, before getting a major price cut, was the most expensive listing in the US.
But for those looking to keep the sales of their homes a little more under the radar, there are whisper listings.
Whisper listings, also known as pocket listings, are for-sale homes that aren’t available to the public. Off-market listings are popular among the ultra-wealthy and are bought and sold by word of mouth.
Los Angeles real-estate agentAaron Kirman recently told Business Insider that he’s a veteran whisper-listing agent -and revealed three main reasons why sellers keep their homes off the market.
Kirman is a top real-estate agent at the real-estate company Compass. He’s been in the industry for 24 years and has sold over $4.5 billion worth of real estate since the start of his career. In 2019, REAL Trends named him the 10th-best real-estate agent in the country by sales volume.
Here’s a look at what compels wealthy homebuyers to keep their houses off the market and to instead opt for whisper listings.
1. Sellers can list their homes for higher prices through whisper listings.
By not putting a home on the market, the seller avoids value expectations, Kirman explained to Business Insider. With whisper listings, sellers have the advantage of pricing their homes above an area’s median listing price.
According to Kirman, sellers see this as an advantage because they are able to price their homes as high as they want regardless of the current state of the market.
“If you go live on the market, you have to publish a price. By not going live, you’ve never been public on a price so you don’t necessarily have to go down,” Kirman told Business Insider. “I’ve had sellers up the price of a whisper campaign because they have nothing to lose.”
2. Whisper listings can be used to keep a seller’s personal business out of the public eye.
Whisper listings can serve specific purposes, particularly when it comes to privacy.
For example, if a seller doesn’t want to put a home on the public market for political reasons, such as a divorce, they’ll use a whisper listing instead.
“Sometimes there’s political reasons as to why people don’t like them on the market whether it’s divorce, business reasons, or they just want to keep it quiet,” Kirman told Business Insider.
3. Whisper listings are exclusive and often viewed as a symbol of wealth.
Some sellers prefer to use whisper listings because they are more exclusive than public listings and, as such, are oftentimes seen as a symbol of wealth. However, Kirman told Business Insider that he doesn’t think using a whisper campaign, for the sake of exclusivity, is effective in today’s market.
And within that, there’s the potential downside of missing a prospective sale simply because the agent is not connected to the right person.
“The thing is, I don’t know everybody. So I always tell people there may be that one multimillionaire or billionaire that, because you’re not out there [on the public market], you missed – and they will go buy another house that was public,” Kirman told Business Insider.
Here’s the official announcement, but the WSJ said that bringing in Dragoneer probably means that the IPO is getting close:
On Tuesday, Compass announced its $370 million Series G round of fundraising at a valuation of $6.4 billion — a 45% increase in valuation in 10 months. This brings its total capital raised to more than $1.5 billion.
New and returning investors cited Compass’ consistent growth, proven scale across the largest real estate markets, and proprietary technology as the key reasons why they invested. They view Compass as uniquely positioned to build a real estate platform that makes the search and selling experience intelligent and seamless to deliver superior results for you, the Compass client.
This round of financing positions Compass to:
Fuel our technology investments and advancements, including hiring additional Product & Engineering talent and accelerate software development, such as our upcoming launch of a revamped consumer search experience, which will help me get the best offer for your home.
Further invest in programs like Compass Concierge, which empowers home sellers to sell their home faster and for more money by fronting the cost of home improvement services like staging, painting and more, which will help sell your home faster and for a better price.
This investment brings us steps closer to realizing our mission to help everyone find their place in the world, and I am excited for this next chapter!
Q: Why did Compass decide to raise more capital?
A: Funding from investors makes it possible to invest in our proprietary technology to create a next generation platform for home transactions and ownership, and also to support other programs such as Compass Concierge, which help us empower our agents and grow the company.
As with past rounds, the decision to fundraise was not made due to lack of capital. We will use this funding to drive investment in industry innovations that attract both sellers and buyers to the Compass platform, delivering superior results that, in turn, empower our agents to grow their business.
Q: Who are the investors?
A: Participating investors include a select group of longstanding partners and new investors including Canada Pension Plan Investment Board (CPPIB), Dragoneer Investment Group, Softbank Vision Fund and Qatar Investment Authority (QIA), among others.
Q: Why did investors decide to invest?
A: New and returning investors cited Compass’s consistent growth, proven scale across the largest real estate markets, and proprietary technology as key drivers of their investment. They view Compass as uniquely positioned to build a modern real estate platform making the search and selling experience intelligent and seamless to deliver superior results for buyers, sellers and their agents.
I was the 160th agent hired in the region. Now there are 565 Compass agents in San Diego County!
In the beginning, we thought that Klinge-Realty-Powered-By-Compass had a nice ring to it, but it proved to be a mouthful, so we changed to the Klinge Realty Group for ease of use.
We’ve hired Brittnie Dixon to be our licensed assistant. She has been doing a wonderful job with marketing and special projects!
We’ve joined the company’s sponsorship of the Del Mar Thoroughbred Club, which means you will see Donna and I in the race program this weekend.
We are also contemplating a move to the office at the La Costa Resort.
We have a new website being developed that should launch in the next few weeks. I was hoping to combine it with bubbleinfo.com but formatting them together is still being explored. There will be a blog!
Most of all, I’m glad Compass has a strategy to dominate the real estate universe. It’s not perfect, but at least we have a strategy! I’ll get into our Coming Soon program in more detail as time goes on, but consider how the entire industry has rushed to Coming Soons as a primary marketing device.
Want a sample of how the public perception has changed about selling homes?
A consumer (not an agent) said this month, “If you don’t sell your home off-market, and have to put it on the MLS, then people think something is wrong with it…..or the price.”
The traditional way of selling homes has been picked apart for years now, and the players of the future are emerging. It’s shaping up to be a competition between full-service brokerages vs. Redfin vs. ibuyers.
This article describes the power play, and features Compass as Case Study #1:
Compass has traded capital for rapid growth, raising a reported $1.2 billion and a valuation of $4.4 billion. With these resources at its disposal and not shy about losing money for the moment, Compass has been catalyzing growth by offering significant sign-on bonuses, investing deeply in technology, and doubling down on M&A.
Many observers have a hard time understanding how any brokerage can invest so aggressively, often complaining that “it’s not sustainable” – “it makes no sense” – “it’s not a profitable way to do business”.
It does make sense, however, if you consider the superpowers that a company gains by reaching the tipping point first and thus becoming a single, dominant company that can 1) grow by making the market and 2) differentiate and dominate through data.
For Compass, San Francisco is ground zero for this strategy, where the firm has about 36% of the market. Compass has expanded its local footprint quickly through acquisition, the latest being the March acquisition of Alain Pinel with its1,300 agents and $12.2 billion in 2017 sales volume—the third such acquisition in 8 months. According to Compass, the company is not only the biggest brokerage in the Bay Area, “it is now the largest residential brokerage in the country by sales volume, growing from $15 billion to more than $35 billion between January 2018 and January 2019.”
Compass has realized that market share makes their brokering power bigger. With more listings and more buyers, they can bolster your exclusive “coming soon,” “off-market,” and “in-house” transactions that the competition can’t match, creating a “FOMO” (“fear of missing out”) effect in both customers and agents.
If you’re a consumer or an agent looking at the screen below from compass.com, which shows Compass’ exclusive off-market and coming soon listings, how could you not work with Compass?
These tactics fuel the incentives for buyers to work with Compass because Compass has the exclusive listings. And that means sellers have to work with Compass because they have all the active buyers working with their brokerage. And finally, agents will have to work with Compass because that’s where the action is. Boosting agent recruitment then brings in more listings and buyers, fueling that superpower growth loop.
If you want access to the market, you now have to go to the company who has the greatest ability to make the market, and that, in San Francisco, is clearly Compass.
Compass is working off this specific strategy:
Hire the top listing agents in each market area.
Create a search portal that rivals Zillow and Redfin.
Offer Compass Concierge to get homes in top condition prior to selling.
Offer exclusive listings on compass.com for days/weeks in advance of MLS input.
Use strategy to attract buyers & sellers, and recruit more listing agents.
The not-so-obvious critical step is the creation of a national search portal that intends to be the dominant real estate website in America. The current version has a ways to go before deserving that attention, but after another year or two of development it could be worthy.
Notorious Rob explores Andrew’s article further here:
Are you thinking of selling your home, and curious about the idea of out-fitting it for a multi-gen buyer? Or want help in getting the home into top condition in order to sell it for top dollar?
We’re here for you!
The Compass Concierge program is willing to pay for repairs/improvements to your home, and be reimbursed at the close of escrow. At first, the program was just for the basics, but it’s been expanded to include virtually everything!
And it’s free – the service comes with listing your home with us, at no extra charge!
Here are examples of what’s been done lately:
In Los Angeles, an agent used Compass Concierge to buy — not stage, but buy outright — $900,000 worth of furniture in order to win two listings, one worth $23 million and the other worth $87 million.
In Philadelphia, an agent was in the midst of a contentious divorce sale. The husband and wife weren’t talking and neither wanted to pay for the staging, painting, and cosmetic repairs the home needed. So the agent pitched Concierge as the solution, and solved the problem!
There was a buyer looking at a million-dollar property listed by a Compass agent that needed a lot of work, but the buyer couldn’t afford to pay a $200K down payment and then shell out another $200K in cash for remodeling. The seller and buyer came to an agreement that the seller would use Concierge to do a $200K remodel first — raising the sale price to $1.2 million but only increasing the down payment by $40K. The buyer was floored.
A brief spin around the house while listening to upbeat music, which is just enough to pique your interest, and make a buyer want to schedule a tour of this 6,115sf estate that Brett has listed for $11,495,000:
Yesterday, we met briefly with Peter Jonas, president of the west region of Compass. He likes to reach out to agents to stay in touch with what’s happening on the ground, which is commendable.
We talked about the criticism received about the story that implied Compass doesn’t have a clear strategy for turning a profit, but the specific question was regarding the ancillary services of escrow, title, and mortgage, not the company in general.
He said that once Compass has reached 20% market share in the 20 largest markets, then they will put more focus on the next step in building the platform. While there has been a few escrow companies acquired that were owned by brokerages that joined Compass, there hasn’t been any other effort to build the ancillary-services division yet – but it’s coming.
We also discussed the I-News report that said Compass was going to implement 70/30 commission splits – which are the norm in New York City, according to Kayla. Peter confirmed that there are no plans to do that here. He said, “If we did, we wouldn’t have a brokerage!”, to which I agreed.
We marveled at the incredible growth of the local team.
Compass hired the first local agent in January, 2018.
I was #160 when we came on board in July.
Today there are 498 realtors and assistants at Compass San Diego. We also have 62 local Compass employees to support us.
I think we all can agree that changes are coming to the industry. The agents who expect to be around a while are figuring it out – you’ll need to be on the right team, just to survive.
The agent-population growth suggests that Compass is one of the best choices!
"I cannot believe there are no reviews of Donna yet, ugh!! She is the secret sauce of the Jim Klinge/Donna Klinge combo! I will touch on Jim here, but Donna is why I'm so totally loyal to these two (no offense to Jim :)).
I consider myself a rather savvy buyer/seller. I've bought/sold 7 times in more "
"Jim and Donna Klinge are by far the most professional, personable and responsive realtors I have ever worked with. They provide VIP concierge level service in every area of the process of selling your home. My home was marketed so successfully that we received an offer the day after our first and only open house. Thanks to Jim's pricing and negotiating, our house is now the highest sold in our community... more "
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