As the novel coronavirus continues its deadly spread, some sellers are understandably skittish about letting a parade of potential buyers traipse through their homes day after day. That’s leading some sellers to consider a more discreet sales strategy usually reserved for public figures or the very wealthy: the private listing.
As the name implies, private listings are just that — private, said Brian Dougherty, managing director of Compass in Boston. Agents don’t have to put the property on the Multiple Listing Service, “where it gets exposed to the entire brokerage community and general public,’’ Dougherty said. Many MLS chapters, Dougherty explained, including MLS PIN in the Boston area, have arrangements where they syndicate the listing information and property photos to dozens, even hundreds, of partner sites, such as Zillow.com, Trulia.com, and Realtor.com.
That broad reach is typically a good thing for both buyers and sellers; the more people who see a home, the more interest and offers it may receive. That helps ensure a level playing field for buyers and the highest market price for sellers. “A seller is usually best served by taking advantage of the incredible exposure that MLS provides,’’ Dougherty said.
However, some clients — particularly at the higher end of the housing market — simply don’t want it known that they’re selling, Dougherty said. “They may not want the entire brokerage community and the public and press to see photos of their home, their art collection, their children’s bedrooms,’’ he said.
Matt Dolan, a broker with Team Harborside at Sagan Harborside Sotheby’s International in Marblehead, has used private listings to keep sales quiet for couples going through a divorce or politicians, but he also represents a seller with an extensive antiques collection who doesn’t want to publicly disclose the address of his treasure trove and worries about browsers pocketing a priceless rarity. So Dolan is instructed to mention the home only to vetted clients. “I’m not allowed to market it, but if someone is looking for this type of property, I’m allowed to tell people about it,’’ he said.
Many private sellers have very concrete reasons for keeping a listing quiet, Dougherty noted. “Think of a public company CEO who lists his Boston mansion for $10 million,’’ he said. “Why? Tough times ahead? Does he know something about the company that the shareholders don’t? Is he leaving the company for another position? … Speculation and reputation can impact stock prices.’’ Likewise, it could look bad if word got out that the same executive purchased a pricey vacation property on the Cape just weeks after announcing mass layoffs.
Realtors discreetly market such properties to trusted agents and clients in their network. Some rely on members-only resources like the Top Agent Network (TAN), which is open only to the highest-producing tenth of real estate agents, to exchange information about off-MLS listings.
Forgoing the MLS intentionally limits the pool of potential buyers, which can reduce competition and therefore the sale price. But it can also create an attractive exclusivity. “Buyers always want what they can’t have — or don’t think they can have,’’ Dougherty said. “So there is something very powerful in saying to a buyer: ‘Listen, this property isn’t on the market. They’re very private, but I can get you in to look at it.’ ’’
And at a time when we’re instructed to keep our distance even from close friends and relatives, limiting the number of buyers who enter your home holds a certain appeal.
“It’s very disruptive in general to have people come through your home,’’ said David Faudman, founder and chief executive of TAN, “but it’s super disruptive if you’re worried you’re going to put your health at risk.’’
Dougherty said he’s seen greater interest in private listings as the market reacts to the COVID-19 pandemic. But it’s not just that sellers are hesitant to invite masked strangers into their homes. With open houses and group showings mostly out of the question, the mechanics of the market have slowed down considerably — but buyer expectations haven’t, and listings that languish still hold a certain stigma. “Sellers are reluctant to place their homes on the market right now and have it accrue the harmful ‘DOM’ metric,’’ Dougherty said, referring to the “Days on Market’’ clock that starts ticking as soon as a property is listed on MLS.
“Psychologically, buyers will often question or even turn away from a property that’s been on the market too long,’’ Dougherty explained. “If I bring my buyer to a property in Brookline that’s been on the market for 400 days, you better believe that we’ll use that in our negotiations,’’ he said — assuming a buyer is even willing to see such a home in the first place.
“If you’ve been on the market more than a week, you’re not getting your price, and you’re not getting multiple offers,’’ concurred Mary Gillach, principal at The Gillach Group in Chestnut Hill. Fair or not, “it’s always been an indicator to buyers that something’s wrong.’’
Part of that is just due to the typically frantic pace of the Boston market. “The way you buy and sell properties here is you create this urgency,’’ Gillach said. Homes are often marketed before listing to stoke interest, with offers due after the first weekend. “You’re seeing 60 other people at the open house and seeing them again the next day,’’ she said. “There’s all this urgency built around time, because there’s always demand — and that, I think, is going to change.’’
That’s because, with open houses pretty much extinct for the time being, it’s almost impossible to create a sense of urgency through one-on-one showings, Gillach said. “If you see 80 people at an open house, I don’t have to tell you we have a lot of interest — you can see it for yourself,’’ she said. That’s impossible to replicate with staggered, private showings, and it might require a wholesale re-education of Boston-area buyers and sellers. “It’ll take a while for people to get used to the fact that days on market doesn’t say as much now,’’ she added.
Speaking of shifting expectations, Gillach has noticed that some sellers are now happy to get what they consider to be a fair price, as opposed to holding out for every last dollar — a trend that would seem to bode well for private listings. “I’m finding sellers are much more reasonable — they’re not tanking their prices, but they’re saying: ‘Hey, we think our house is worth X. If you find someone who will pay X, I only need to see one person,’’ she said. “And that is a huge shift in consumer behavior.’’
Faudman, of TAN, suspects that attitude and the pandemic may change the way people sell their homes for years to come. “People will think: Do I need people parading through my house to sell it? Is that really how it works, or is that just something I’ve been told?’’ he said. It’s fair for sellers to expect their agents to earn their commissions, Faudman added, by working their networks and calling around to locate qualified, motivated buyers — instead of showing their home to every Tom, Dick, and Harry who wants to poke around their kitchen.
Gillach said there are strategies to limit the number of people visiting your home without resorting to a private listing, however, pointing to a page pulled out of Tom Brady’s playbook. Buyers who wanted to tour the Brookline estate of the — gulp, former — Patriots quarterback had to show proof of financial viability beforehand. “Sellers don’t want the looky-loos coming through anymore, and there are better ways to control that than just doing a private listing,’’ she said.
And in the current market, where virtual tours are the new first step, Gillach said a thorough video walk-through can weed out the vast majority of casual buyers who aren’t a good match for the home. As Gillach takes her camera through the front door, up the stairs, and into every nook and cranny of a house, buyers can see that the bedrooms are closer together than they thought or that the road is too busy. “So we’re screening out people who don’t need to come see the property, and we’re doing that in 10 minutes,’’ she said. “It’s convenient for everyone, frankly.’’
Gillach is also limiting in-person showings to the decision-makers — no kids, no Uncle Jim — and she asks other agents to tag along via video, not in person. And among other precautions, such as wearing disposable gloves and masks while in the house, she also asks buyers to confirm — in writing — that neither they nor anyone they’ve been in contact with have been on a plane or were exposed to the virus in the past 14 days.
Dolan prefers to list a home on the MLS whenever possible to take advantage of its reach, while relying on video tours and a verification process to “control the flow’’ of buyers. His team adheres to similarly strict safety protocols for in-person showings, and now requires “a fresh preapproval’’ before an on-site viewing. “Just because you were approved a month ago,’’ he said, that’s not necessarily good enough, because mortgage guidelines are changing quickly.
Kathy Condon, MLS PIN president, said one of her “biggest concerns with off-market listings is with sellers not receiving adequate exposure for their properties and buyers or their agents not knowing that properties are available, which also could lead to fair housing issues.’’
Ultimately, Dougherty said, agents work for their sellers and have a responsibility to sell their homes in the manner in which they are asked. But absent any serious privacy concerns, he said he, too, would recommend that sellers list their homes on MLS — and to go for it now, pandemic or not. “Buyers are home. They’re bored. They’re dreaming or planning,’’ he said. And if your home hits the MLS, they’re going to see it.