Properties off MLS…. controversial.
A lot has been said and written on the subject of properties selling “off MLS”, meaning they have not been on the Realtors’ Multiple Listing Service and were sold before making it to that database, common to all Realtors.
Coming from a country where a common database of properties for sale is nearly non-existent, I can definitely vouch for the huge benefits that such a common database offers, both to buyers and to sellers. We could go on and on describing those benefits, but let’s just say that it pretty much ensures that a property for sale, by virtue of being exposed to all the agents around, will sell for its real, highest market value (low, high, but the most accurate result of supply and demand). Also, a buyer will find all that is available for sale in one place, which means more choice and less wasted time going from one provider of information to another provider of information.
So, why sell a property “off MLS”? There are some unique situations where the sellers do not want the whole public to know that they are selling, and that is understandable. There will always be special circumstances (i.e. very high price range, specific sellers’ needs or preferences, etc..). But these exceptions aside, I see mostly downsides to not offering a property for sale through the MLS:
- Less information for buyers and sellers about current sales activity, and "comparables". How do you price a property if you don’t know how, and how much similar homes sold for? This information is easily accessible (and reliable!) in the MLS.
- A situation where both the seller and the buyer are “gambling”; one gambles that he/she bought for a lower price than if the house had been offered to all potential buyers, the other one gambles that he/she sold for the best, highest price.
- A lack of confidence by the clients-buyers that they are being treated fairly: after looking for a home for several months and missing out on several offers, a buyer is not happy to learn that “that” house was for sale, but (s)he did not know about it,
- The creation of smaller entities, or “channels”, where such properties are “known” or “available” to select agents and their clients; again, this is going back to a system without a reliable common database for all, and in my opinion does not serve the public well. Indeed, even those agents may be unaware of some other offerings in a different channel, and their clients will miss out on those opportunities.
The practice of selling real estate through an MLS is not perfect, but it is the result of an evolution, and it is immensely practical and fair, and someone coming from a system where it does not exist sees it right away. As an agent, I keep close tabs on all channels showing properties available for sale, even “off MLS”. But using “alternative channels” excessively undermines the MLS, and I am afraid this will make it more difficult and unpredictable for the public to find or sell real estate – and a lot less efficient.
Let me know what you think!
Thanks for reading,
Silicon Valley real estate specialist
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