Instead, she listed it privately.
“It was perfect, I didn’t have all the hassle,” says Cooper, a photographer who now lives in upstate New York. “I didn’t want to do a bunch of showings. Every time someone showed up, I’d have to get it just the way they staged it.”
Like an increasing number of high-end homeowners, Cooper discovered the power of private listings, in which a property is announced for sale to a select group of agents without ending up on the multiple listing service.
Cooper originally planned to list the home at $895,000. But instead, she and her agent, Theo Adamstein of TTR Sotheby’s International Realty, listed it privately at $945,000. It sold for $950,000 in a matter of days.
What exactly is a private listing?
Private listings can be thought of as word-of-mouth listings agents share with one another.
Different from private sales, in which a seller and buyer work out an agreement without the guidance – or fees – of a real estate agent, private listings are entirely agent driven.
With a private listing, Adamstein says, he makes a three-part marketing push for the property.
First the house – which is photographed, staged and in the condition it would be to go on the public market – is sent out to local members of the Top Agent Network, a membership organization of the top 10% of agents in 34 markets nationwide.
Next he announces the property through an internal communication to 400 agents at his firm.
Then, he sends a personalized email with details about the home to a handpicked list of agents that he knows are most active in the neighborhood.
If a buyer does not immediately emerge, he may host an open house for brokers and agents to come to look at the house.
Advantage to sellers
Adamstein says that while sellers might opt for private listings because they, like Cooper, want to avoid the hassle of an open house, more often it’s because they simply want privacy.
“They don’t want someone that’s not qualified to buy it traipsing through or who just wants to see the home because it is someone famous,” he said. “The client will say, get the word out to the right market, the right agents and we’ll try to do this in a quieter way.”
Other times sellers list privately to test the market and see if it will support their top asking price.
An agent may feel that a seller’s dream price is too high and the comparable sold properties don’t justify it. There could be a concern that by placing it on the MLS at a price that is too high, the property may languish.
But by listing it privately, at the seller’s desired price, they avoid starting the MLS “days on the market” clock, which can stretch from weeks into months or even years, especially when the luxury market is sluggish.
“My strategy isn’t that we never want to put it on the MLS,” says Adamstein. “If they are very private or famous, then it stays private until a buyer comes along. With other clients we may say, ‘If we don’t sell it on the private market within three weeks, we can put it on the MLS and be better informed’.”
For buyers, private listings may come at a premium but some are happy to pay it if it means avoiding a bidding war.
Accessing the private market
The Top Agent Network has become the primary marketplace for private listings. In the Washington DC area, for example, some 200 properties are announced privately there every month.
The number of properties on the system increased by 34% in the past year compared with the year prior and sales volume has gone up 44% over the same time, according to David Faudman, founder and CEO of the Top Agent Network.
“Everything is for sale for the right price,” says Faudman, who designed the communication system for the highest producing agents in a market. “Going on the MLS is a lot of show and tell. We’re for the serious, not the curious.”
The private nature of these listings has raised concerns that a private listing market only available to elite agents and not to all may adversely affect the MLS and diversity among buyers.
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“A real buyer with real money will get a real real estate agent,” says Faudman. “Our agents don’t care who you are. The only discrimination may be against someone who can’t afford to buy the house.”
Of course, not all agents are fans of the private listing.
Matt Dolan, a broker at Sagan Harborside Sotheby’s International Realty in the suburbs north of Boston says people going through the process of selling their home while trying to buy a new one have been drawn to private listings because they want more control. “People want to move, but only if they find the house they want,” says Dolan.
He calls the private marketplace a disorganized market. If you want $1 million for your home, he says, someone will buy it privately for $950,000. But if you put it on the public market for $1 million, you don’t know if it might sell for even more.
“Generally I’m an advocate of getting it to market, because the public market is an orderly and transparent process.”