The covert market of “pocket listings” in today’s luxury real estate world is much more common than you may appreciate. Much like the underground world of art sales, many luxury home connoisseurs desire to keep their business very private. A select handful of luxury brokers knows the ins and outs of this ecosphere, and how to successfully transport their clients through this hush-hush maze. Let me share some interesting revelations about discreetly available estates, along with the current local “off-market” sales statistics that I have tracked over the years for my exclusive clients.
There are many advantages – and a few disadvantages – when selling or buying off-market listings. First let’s address the assumptions that many sellers have when considering selling their property “off-market”:
“No one will find out about the sale of my home (especially my neighbors,)”
“I will be able to get a higher sales price because my listing is exclusive.”
“Isn’t it true that luxury buyers prefer off-market listings?”
While many of these assumptions can be true, quite often the opposite happens. Let’s delve into the facts.
I can honestly share – as a luxury agent with over 20 years experience -that selling an off-market listing is often a challenge. It is important to understand the facts of the private database your listing agent claims to influence. No matter how large a listing agent’s private cache of clients, it may not be impressive enough to attract the right buyer and win you the maximum value for your property. That said, if your home is absolutely amazing and very rare, it absolutely can be sold off market for top dollar.
The decision to list off-market should be based on facts: how many homes actually sell in the price band you choose to list your home? If only 2 or 3 properties sell per year in that price band, it may be unwise to confine yourself to an off-market listing. Quite often I advise my clients to try off-market for 30 days prior to going live in the MLS. This creates an exclusivity and hot opportunity for a potential buyer. This strategy combines the best of both worlds.
Another interesting game plan is to list off-market after you have failed to sell your home live on the Multiple Listing Service. This is effective for ultra-luxury listings that have worn out their welcome on the MLS. Buyers hope they can negotiate a better deal once the home goes off market. Quite often this is the case because the seller has been worn down, faced reality and are finally ready to sell at the true market price.
Needless to say, the decision to buy or sell off-market is not to be taken lightly. It should be based on facts and the advice of a seasoned, local, knowledgeable luxury agent, who is a proven performer in your price range with data to back up their recommendations. Let’s review the past 5 years of off-market sales on the Monterey Peninsula in a variety of price bands:
2017 Off-Market Luxury Real Estate Sales
Price Band (Millions) #Sold % of all RE Sales
2-3 10 12%
3-4 9 22%
4-5 7 37%
5-10 3 14%
10+ 2 66%
Total sold for $2 million+ = 31 (19%)
2016 Off-Market Luxury Real Estate Sales
Price Band (Millions) #Sold % of all RE Sales
2-3 15 17%
3-4 3 7%
4-5 3 27%
5-10 4 23%
10+ 2 20%
Total sold for $2 million+ = 27 (16%)
2015 Off-Market Luxury Real Estate Sales
Price Band (Millions) #Sold % of all RE Sales
2-3 14 15%
3-4 5 13%
4-5 2 14%
5-10 3 15%
10+ 1 25%
Total sold for $2 million+ = 25 (15%)
2014 Off-Market Luxury Real Estate Sales
Price Band (Millions) #Sold % of all RE Sales
2-3 10 12%
3-4 4 12%
4-5 2 12%
5-10 4 26%
10+ 3 50%
Total sold for $2 million+ = 23 (15%)
2013 Off-Market Luxury Real Estate Sales
Price Band (Millions) #Sold % of all RE Sales
2-3 4 6%
3-4 2 6%
4-5 2 10%
5-10 1 8.3%
10+ 3 75%
Total sold for $2 million+ = 12 (9%)
For the past five years there has been a slow steady climb of “off-market” sold properties; 2017 was the record year with 19% of luxury sales sold “off market.” It is important to note that “off-market” sales success will trend positive with strong consumer confidence, and lower interest rates. My experience with ultra-luxury “off-market” sales, is that it is hard to predict trends because quite often it is an emotion buy decision, verses I need a home to live in. My advice is don’t pretend to be an expert, just because you are a luxury buyer or seller, always consult with a luxury agent expert.
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