Have you heard of off-market selling? It’s become a bit of a thing in Boston real estate circles. And I have opinions about it. Mostly negative.
So let’s talk about it. Simply put, selling off-market is when an agent selectively notifies only a small group of agents about a listing, to see if they might have a suitable buyer. There are a lot of agents in the Boston market who think it’s clever or sexy to sell their listings this way. (One has even admitted to me that she will ONLY inform the agents she likes to do deals with!) Bottom line: No public listing or marketing of your precious property.
It’s easy to see how this benefits agents and brokerage firms, who manage to keep both sides of a transaction in-house and thus increase sales volume for the firm. Some agencies in Boston actually incentivize their agents to sell properties off-market in an effort to control the market or increase market share.
BUT it’s harder to see how this benefits the seller. In fact the seller’s downside can be huge; after all, most sellers care about their sales price above all else. Basic economics tells us that the greater the demand, the higher the price. So the surest way to get the best price is to get that property on the market—exposing it to the maximum number of buyers possible, and all at the same time. However, off-market selling short-circuits that process.
And here’s something else to consider: Right now, when in most parts of the U.S. demand is high and inventory is low, sellers who go off-market run a real risk of missing a classic seller’s market.
Are there upsides to selling off-market? Sure, sometimes. There are definitely sellers who do not want their home publicly marketed— confidentiality, privacy, a fast sale, any number of reasons might lead a seller to prefer to sell their home this way. The important thing is that they understand the risks.
My argument is that sellers need to be informed or educated appropriately about these options before they decide. They should understand the risks versus benefits of selling on or off-market. Instead, for the gain of an agent or a firm, I’m concerned that sellers can be “hoodwinked,” or persuaded into selling off-market against their own interests.
Selling off-market might be an easy transaction for their listing agent. But it doesn’t offer certainty to the seller that they are getting the best possible price from the best possible buyer.
And that is something about which I feel very passionate.