Real estate is a pretty straightforward supply-and-demand market, which means that when there are fewer homes for sale relative to buyers, home prices and appreciation jump, as has been the case for years in the East Bay.

 

The converse is also true -- when the number of homes for sale is high relative to the number of buyers, prices compress.

 

But for this to really work, buyers and sellers must have access to ALL a market’s homes for sale. Historically, the multiple listing service (MLS) has served as a market’s complete inventory of active listings.

 

Sometimes sellers have legitimate reasons to keep a property for sale off the MLS -- for example, to maintain the privacy if famous or want their affairs to remain private, or if a family with small children cannot easily market the home well. Some sellers and their agents sometimes list a high-end home off the MLS to test the market.

 

However, this article does not address these specific situations, but a new, emerging East Bay trend where some brokers now require their listing agents to keep listings off the MLS for a period of time -- sometimes two weeks -- as "coming soon" listings.

 

When used as a blanket policy toward all listings, marketing homes off the MLS can limit exposure a seller receives by limiting the pool of buyers to just those who happen to encounter the off-market listings.

 

This across-the-board policy can benefit brokers, as it increases the likelihood they represent the buyer on the home sale, in addition to the seller.

 

This obviously benefits the brokerage and agent, but not the seller, or buyer. Which is why Red Oak Realty has a policy to use off-market listings sparingly, only when the practice really serves the seller’s best interest.

 

Unless agents manage the off-market process carefully, they may list the property before professional photos are taken and a marketing strategy is refined. This means that the first time the listing is visible to the public, it's not likely seen in the best possible light, and that first impression can be hard to overcome in a competitive market.

 

There’s an additional risk if the market is shifting when it’s critical for a listing to get widespread visibility as quickly as possible. Keeping it off-market could diminish the value of the home if it’s held unnecessarily from maximum exposure.

 

But Red Oak Realty believes the universal strategy harms consumers overall, which is why we, as a policy, encourage our agents to list their homes in the MLS when ready to sell and to use the "coming soon" strategy or off-market sales on a case-by-case basis.

 

Traditionally, the most beneficial listing strategy is to market the property on the open market -- by listing it on the MLS.

 

That’s because:

 

• The MLS is considered the most complete collection of homes for sale. It is the essential launching ground for widespread exposure of a home. Listing your property on it therefore increases exposure to licensed agents searching for active buyers.

• It feeds to search portals like Zillow, Trulia and realtor.com, as well as brokerage sites like Redfin, increasing exposure to buyers who may just be starting their search.

• It’s where open houses and brokers tours with access to the interior of the property are available to the public, granting intimate exposure to the more detailed aspects of the property.

• Because it generates a high level of visibility, it’s the most reliable way for sellers to generate multiple offers, thus increasing the sale price of a home.

However, there are extenuating circumstances in which an agent or seller may decide not to include the property on the MLS, and thus hold the property as a pocket listing:

 

• They want to keep the listing relatively quiet. This may be appropriate if the sellers are private people, they want to limit access to their home, or they prefer to not move out and/or stage the property.

• They have small children or other family circumstances in which having the public walking through their home may add extra unwanted additional stress.

• They want to “test” the market to see if the property, or a price, is attractive to buyers - and they want to do it without accumulating “days on market” (the number of days the property has been on the MLS), or the fees associated with prepping the house to maximize sales price (like painting, landscaping, or light kitchen and bath updating).

Sellers should be cautious when a brokerage mandates that a property be kept off the MLS. They should ask themselves if it really benefits their chances of getting top dollar for their home or primarily benefits their broker, or agent.

 

Bottomline: There should be no blanket policy on how to market your individual property, especially when holding it from the market as a mandate rather than a special circumstance.

 

Whether listed on the MLS and marketed widespread, or kept as a pocket listing, your home deserves a customized marketing solution, that puts your needs first.

 

At Red Oak Realty, we passionately put our clients first -- it’s one of our core values. Another of our core values includes crafting real estate strategies that fit our clients’ particular needs and circumstances.

 

If you are thinking of selling your home this year or next, reach out with any questions so we can talk through the options.