Recently, we’ve heard a lot of clients asking if homes are selling “off market,” meaning they never hit the open market for the general public to see. In a seller’s market, off-market sales tend to spike. So the short answer to the question is yes.
Pretty frustrating, right? You can bet it is frustrating. Especially if you are a buyer trying to find a home and they keep selling out from under you. “But how is that fair?” you might ask. Well, it doesn’t feel fair, and at the same time it is perfectly within the seller’s rights to do so.
When a property is listed with a Realtor, the Heartland Multiple Listing Service requires that it be entered in its system within three days unless an MLS waiver has been signed. This waiver can either be temporary or permanent. If a seller signs a permanent waiver, this allows the listing agent to promote the sale of the home without putting it into MLS. In some circles, you might hear these referred to as a “pocket listing.”
You know the old saying, “Its all about who you know.” This can be very true in a low inventory market. Your Realtor must have his or her ear to the street at all times and be networking with other agents on your behalf to help find you a home. The Realtor community is a tight knit group and with 10 percent of the Realtors out there doing 90 percent of the business, we work with the same agents all of the time. Even more so after the recession. When I started in real estate 11 years ago, there were over 12,000 Realtors in Kansas City. Coming out of the recession, there were less than 7,000. So that 10 percent group has gotten much smaller which makes it easier to network for upcoming inventory.
Please don’t get me wrong. The vast majority of real estate sales happen the traditional way. A property is listed with a Realtor, and the Realtor then advertises it in MLS for all the world to see. In my experience, this is the best way to achieve top market value for your home if that is the goal. Now, in some instances it may be more valuable to the seller to sell their home off market and avoid all of the stresses that come with having their home on the open market. For example, we have had clients with lots of young kids at home choose this option. Or perhaps a seller with a really demanding work schedule that requires day sleeping.
Ultimately, I want you all to know that there is no secret society of Realtors out there selling tons of homes secretly behind closed doors. We are not all standing in a candle lit room, wearing long robes, sharing top secret information about the best real estate that Kansas city has to offer, which you will never know about. And at the same time, when you are looking to hire a Realtor (especially in a low inventory market), make sure that you find one who is very active in the market. You want your advocate to be in communication with the Realtor community daily.
Our team is in the office every day of the business week, just like most other businesses out there. Being in the office daily allows us to network with other agents in our company about upcoming listings and buyer needs. These simple conversations help us to be one of the first agents through the door when a listing goes live. Please note: Being first does not always guarantee that you will get the house. Especially when there are multiple offers. But at least you get the chance before it just shows up in MLS under contract. In those cases, “it is better to have loved and lost, than never to have loved at all.”