The Motivation Behind the Off-Market Listing.

January 27, 2016


The post I wrote earlier this week about the pre-market opportunity in San Carlos certainly churned up a lot of questions and discussion about off-market listings, and why anyone would ever consider selling their house off the MLS in an environment like we are experiencing right now all over the Peninsula. It's a subject that we've tackled on the blog numerous times over the past few years, but it's worth revisiting it.

First of all, conventional wisdom states that you'll expose your home to the greatest number of buyers if you list it on the Multiple Listing Service. That much is a no-brainer. But exposing your home to the greatest number of buyers doesn't necessarily guarantee that your home will sell as quickly or for the highest price than not going the conventional path. That paradox alone enough to get some home sellers thinking about whether to list their home on the MLS, or to sell it off market.

But if I had to pick the top three reasons why someone might decide to sell their home early or off-market, here are the top 3:


If you've ever tried to market your home while you are still living in it, then you already know that it can be a giant pain in the rear. It's imperative that you keep your home in “show” condition 24/7 while the house is on the market, and you have to contend with the random, frequent, and sometimes unplanned showing requests. This inconvenience is compounded exponentially if you have young children at home. And then there's the issue of having to disappear for the better part of an entire weekend to accommodate the open house.

Some sellers simply aren't up those challenges. If they can get an offer that meets or exceeds their expectations (more on that below), they're sometimes willing to take the risk of not exposing their home to all potential buyers in the area in order to get it sold as quickly as possible, and with the least amount of disruption.


Privacy is a key reason why home sellers decide to skip putting their home on the MLS. I can tell you first hand that the majority of people who come through an open house (particularly on the first weekend) are neighbors and lookiloos who have no intention of purchasing this house, or any house. As a listing agent, I'm perfectly OK with that, since it gives me the opportunity to chat with neighbors, and meet potential future clients. But some homeowners simply don't want open their private lives to the whole neighborhood.

Sometimes homeowners are simply going through a really tough time, and they don't want their neighbors and friends to know that they're selling until the last possible moment. Situations like divorce, financial distress, or family problems are compelling enough to value privacy over the potential benefits of marketing their home openly.

The “Premium” Factor.

There is a belief among some sellers and agents that home buyers may be willing to pay a premium to purchase a home before it hits the market, thus enabling the buyer to avoid the anxiety of the multiple-offer circus that is certain to ensue if the home is listed on the MLS. I've seen numerous instances where the seller's belief turned out to be well founded, as they were able to secure an astounding price for their property by allowing someone to have an early shot at it.

There's an old saying in the business that goes something like this “Your first offer is often your best offer.” If you subscribe to that belief, then the person who is willing to hustle to get their offer in before anyone else can see the house or respond in due time may indeed be your best buyer — regardless of whether the home was listed on the MLS or not.

I have seen many instances where a seller shuns an aggressive pre-emptive offer in favor of testing the market, only to eventually sell the house for less than that original offer.  Believe me, it happens.

Listing Agent Motivation?

An interesting sentiment that I often hear is that it's the listing agent who pushes to sell the house off market, as if there's some sort of benefit to them to not market the home on the MLS. I honestly cannot think of a single reason that a listing agent would want to do this.

There's no more powerful and relevant advertising vehicle for a real estate agent than to have their name prominently displayed on a “for-sale” sign in front of a beautiful house that neighbors get to drive by hundreds of times while the home is on the market.  Talk about legitimacy in the minds of the public! The listings that I had over the past two years on Rosewood Avenue, Saint Francis Way, Cedar Street, Brittan Avenue, and Timothy Drive did far more to promote my brand than any amount of paid advertising could ever provide.

What about potential financial gains? Selling a home off-market for an agent is only nominally less expensive for a real estate agent than it would be for fully marketing the home on the MLS. Most of the costliest marketing tasks (photography, fliers, home preparation) are required regardless of how the home is sold, so there's no real financial benefit to the listing agent to pushing the house off-market….. Unless they plan on trying to “double-end” the deal by representing both the buyer and the seller in the transaction and thereby doubling the commission — a situation that is ripe with risk for that agent.

Bottom Line.

For some sellers, deciding to forgo putting their home on the market and instead opting to sell it discretely and privately simply makes more sense for one or more of the reasons that we outlined above. It's the very reason why this stealth market continues to exist and thrive every year, despite the predominance of multiple-offers and overbids for homes that are listed on the MLS.

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