Every agent on the planet uses access to off-market listings, also called pocket and private exclusive listings, as a reason why you should work with them over another realtor. But how common are off-market sales? Who has access to them? And is access to these listings something you should aim for when selecting an agent?
First, let's define what we mean by off-market. Off-market (or pocket) listing really means the property wasn't listed in the local MLS listing service by the seller's agent. But that's a bit deceptive. Because, at least in the Bay Area, there are two types of listings that are in fact entered into our local MLS Listing Service, but which are only visible to agents. This means neither of these two categories make it onto Redfin or Zillow.
The first of these is called Members Only Show. These listings are visible to your agent and are available to show to our clients. The other category is Members Only Do No Show. This means agents can see the property, but we're not really supposed to show the properties to our clients. Some of us use this category as a way to soft launch a listing -- maybe test pricing, maybe create hype -- before we go live. It can be an effective strategy. And some listings are sold before they even make it to market.
Brokerages can also share listings with other agents in their firms before properties get entered into MLS. Every brokerage does this. Compass has codified this into their branded Private Exclusive, but it's really the same internal sharing all brokerages do.
Now, let's pause to take a look at the graphs below for one Peninsula town, San Carlos.
As you can see, there are not a ton of off-market -- or 0 days on market -- sales. Not only that, but most of those off-market sales hover in the 1500-1749 price per square foot bucket. Not particularly lower than "on market" sales...
My first point is: what can data like this even tell us if there are so few listings? Is it meaningful? i think they're only really meaningful in so far as it demonstrates how few off-market sales there really are...
Which brings me to my second point: where are all these off-market sales agents keep claiming they can help you access? Most sales are still on market...
Choosing an agent simply because they have access to off-market listings is not the wisest choice.
And asking your agent only to look for off-markets means you're missing out on viable options. You want an agent who can identify a variety of properties -- both those off-market, those that have fallen out of contract, those others have overlooked or those that have attracted a ton of attention -- and can help you strategize how to write a winning offer appropriate for each unique situation.
I've had more clients get great deals --sometimes significantly below list price -- on properties that have lingered on the market for a while. Just something to think about as we head into a traditionally slow time of year for real estate...
