For those who ‘specialize in the off-market space’, here’s a new excuse to justify your unethical and probably illegal practices: “some buyers don’t want photos of the home they’re purchasing on the internet”.
The real estate market has heated up so much in certain regions that brokers are taking transactions into their own hands—or, rather, their pockets. With increasing prices and, seemingly, more buyers willing to pay an amount that’s leaving sellers with nice profits, the question these sellers keep asking is, “Why bother with the MLS?”
While the answer to that question varies greatly depending on who is asked, more and more brokers are saying don’t list on the MLS, or even Zillow, for that matter.
“It’s an opportunity for a savvy agent, who uses his or her network properly, to make more money for their client,” says Jon Paul Molfetta, a broker with Keller Williams Realty in New York and New Jersey.
“If sellers aren’t familiar with the concept of a pocket listing, I would expect that their area/location doesn’t warrant it. Savvy sellers know when they live in a hot market. They understand the value of having a strong broker with a large network. If they contract with the right agent, they can realize top dollar without the hassle of having every nosy neighbor or unqualified buyer through their home,” says Molfetta.
“Agents who lose touch will lose deals (and) miss opportunities,” says Molfetta. “When someone misses out on a property, they might be willing to overpay for the next one. Regardless, people will not underpay for a pocket listing. If you’re a strong listing agent who controls a portion of the inventory, you provide added value to both the buyer and seller. For the buyer who wants into the neighborhood, you offer the unique opportunity of finding a home before it hits the market. For the seller who is ready to list, you provide a pool of qualified buyers from months of successful marketing and proper lead capture. It’s a win-win.”
California seems to be a haven for pocket listings, where sellers are coming to their brokers and demanding it. Lori Steele is a specialist with Beverly Hills, Calif.-based The Agency, which launched a private national off-market platform last summer called The Pocket Listing Service (PLS). Steele says it’s been incredibly popular among sellers who value privacy and speed, and it helps all the agents under The Agency roof generate business for clients and cultivate their networks.
Steele is involved with The Agency’s expansion through Orange County, Calif., and she says The PLS is a big part of the appeal.
“About 40 percent of all of our deals are done off-market,” she says. “It’s important for seller discretion, and some buyers don’t want photos of the home they’re purchasing on the internet.”
Kayla sent in this old New York real estate story (agent still in the business):
We knew the NYC real estate market was crazy, but we didn’t realize it was Satanic ritual crazy!
Upset “Manhattan millionaire” Daniel Farash tells the Post that he listed his Upper West Side three-bedroom apartment at 310 West 79th Street with Warburg Realty in 2003.
When Farash came home one weekend, the real estate agent holding the open house was naked and screaming, after apparently urinating on his beds, breaking various objects, arranging things to “look like a woman giving birth” – and pooping in a closet!
Farash is now suing Warburg Realty, charging the incident resulted in him selling his $1.4 million apartment for $500,000 less than market value. He also says it’s left him suffering from post-traumatic stress disorder.The broker was identified in court papers by her company as former real-estate agent Julie A. Johnson.
According to a deposition, the firm’s president, Fred Peters, admitted the company knew she was mentally unstable, having discussed her anxiety and stress issues with one of her therapists. But Peters insists the company is not responsible for the damages.
Peters and the company attorney did not return calls for comment.
Interesting – if you have an open house, and the broker knocks over something, the broker is not responsible? We suppose most brokers would pay for damages – but the ones with Satanic and bodily function issues probably wouldn’t. What we’d like to know is whether Warburg paid for cleaners.
Farash has brought his sensational lawsuit to the Post because Warburg is being “uncooperative,” which surprises us because you’d think the realty would want to keep this quiet. And not that we know the details and highlights of Farash’s old apartment, but in 2002, a 2-bedroom in the same building sold for $1.75 million.
Here’s a homebuyer story that also gives a little-known but important tip on how self-employed people can qualify for a mortgage (Freddie Mac only requires a single tax return to qualify). It combines a Zillow-like personal story with some education too – NAR should do more like these!
Hat tip to Rick for sending in this incredible VR – I need to broker these!
Investors are spending real money to buy land in a new city that only exists in virtual reality. Buyers can build whatever they want on their plots in Decentraland. Many hope to make a profit trading goods and services in the virtual world’s own crypto currency. But will Decentraland be an online utopia or a cyber slum?
The National Association of Realtors (who smartly reeled back their launch of a $250,000 new-logo-that-looked-like-the-old-logo campaign), is running new ads in ‘a limited campaign targeting millennials’.
Here are samples – I’ll wait over here by the phone for those millennial calls:
A quieter Sunday at the open house – about half the people as the crowd on Saturday, which makes you think that the internet advertising is what brings them and they are happy to wait until the first open house:
They charge even less in America, and you need good help to handle the load:
“Broke” real estate agents are quitting British disrupter Purplebricks in droves as the fixed-fee agency’s low-margin, high-turnover business struggles to achieve enough sales amid a slowing Australian housing market.
Research by The Australian Financial Review found at least 27 agents had quit Purplebricks Australia since March with overall agent numbers now down to 88 from 105 reported by the company in October when it filed its British interim results.
Purplebricks territory owners (franchisees) and agents, who spoke to the Financial Review, saidthey were struggling to make a living and were preparing exit paths after the $100,000 to $180,000-a-year salaries they were told they could earn failed to materialise.
Employment contracts show Australian agents earn just over $1000 out of the $5000 to $6000 upfront fee vendors pay when they list with the Purplebricks.
Internal sales figures obtained by the Financial Review for NSW – where the market has slowed the most – paint a picture of struggle for many.
They show that 15 agents undertook a combined 768 home appraisals between February and April, but have so far secured just 189 listings between them
While two of these agents have 72 instructions between them, the remaining agents have won between zero and 18 new listings each over the three-month period.
“The concept is brilliant, but the business model is wrong for Australia,” said former Purplebricks Newcastle agent Steve Bashford, who quit in May. “There is a big difference between what they promised us and what we achieved.”
Many other current agents and franchisees, who asked not to be named, made similar observations.
“There’s no money in it. The business model is flawed,” said a current franchisee.
“I’ve sold 50 properties in 18 months and I’m broke,” said another agent who recently quit.
Apart from the $1000 instruction fee, agents can earn additional fees if a customer arranges a Purplebricks home viewing or signs up for a mortgage with one of its partners.
However, much of this additional income has vanished as franchisees have had to hire and pay sales assistants to help clear the backlog of listings.
In addition, agents told the Financial Review, Purplebricks clawed back money from them if a customer complained and obtained a refund.
They also said the company had been “turning off postcodes” in places such as Sydney’s eastern suburbs without notice as agents battled to manage their ever-growing number of unsold listings.
According to its Australian website, since launching in September 2016, Purplebricks has secured more than 5200 listings and sold more than 3600 homes. It currently has 1563 properties for sale.
It reported a £5.1 million loss from its heavily marketed Australian business for the six months to the end of October 2017.
Selling homes in Manhattan is competitive, even without a central MLS run by the realtor board. Once an agent uploads a listing onto their company system, it gets distributed immediately to the regular portals StreetEasy (owned by Zillow), realtor.com, etc. where agents and consumers access the same data.
So even though there isn’t an official MLS, there is a commitment to full market exposure, and giving every agent a shot at selling each listing.
William (KK’s new boss) said that if agents were keeping listings in-house, then the Manhattan board of realtors would step in and do something about it.
It’s going to be competitive everywhere, but if every agent was committed to doing what was best for their sellers, then we could all get along nicely.
He also said that it is very rare that they do a home inspection. There isn’t a requirement for seller disclosures either – it’s up to the buyer’s attorney to include any questions about the property in the contract.
It has been a buyer’s market around Manhattan for the last couple of years. Maybe a sign of things to come everywhere?
Kayla will start her new job there on August 27th! I will let her share her experience here as she sees fit, but she couldn’t be more excited to begin this new chapter in her life!
If the uber-elite believe they need the privacy and are willing to leave mega-money on the table, then fine – pocket all you want. But the typical seller is better served by open-market exposure.
All brokerages are getting into the game, and before long, pocket listings could be the standard, which puts those who aren’t connected on the sidelines.
Buyers who feel a slowdown (and who wonder where the values really are) should proceed with caution when offered an off-market deal – how do you know if the price is right if it never hit the open market?
Do you have a trench coat?” the real estate agent asked, only half joking. The listing he was about to describe was so hush-hush that he and other agents had been required to sign nondisclosure agreements just to obtain the address. In order to get the broker’s tour of this supersecret, $16 million–ish Russian Hill home, I’d have to agree to keep quiet on the pertinent details—and maybe wear my best Deep Throat disguise.
Sound crazy? Not in housing-mad San Francisco, where mum’s the new buzzword in real estate. As many as 20 to 30 percent of agents’ high-end listings are now totally underground. That means no advertising, no listing sheets, no email blasts. In place of open houses, sales tactics for these homes include password-protected websites, phone-call-only marketing campaigns, and, as I found out, NDAs.
Alternatively called whisper, private, or pocket listings, this secretive sales method is increasingly common in the Bay Area, especially among wealthy, privacy-obsessed sellers intent on keeping their names and asset valuations away from prying eyes. Gregg Lynn, an agent with Sotheby’s International Realty, says that about half his listings these days aren’t officially on the market—and his clients’ rationales for doing it that way run the gamut.
There are pre-IPO tech founders who want to keep speculation about their financial outlook to a minimum; or Sand Hill Road types trying to project an air of modesty. And then there’s that oh-so-Silicon-Valley notion that building a whisper network of potential buyers gives a home a level of intrigue, and buzz, that’s priceless. “It’s like if you’re in a wine club: Are you in the basic wine club, or do you get invited to the exclusive events?” says Rachel Swann, a Noe Valley–based agent with the Agency, a luxury real estate firm with offices in Los Angeles and San Francisco. “People like that. Especially at the high end.”
In a typical home sale, agents upload information about a property to the local Multiple Listing Service, or MLS, as soon as the house is photographed. That info—photos, specs, property history—is then distributed to dozens of websites, including Redfin, Trulia, and Zillow, where it’s publicly available. To the would-be anonymous seller, however, that’s simply too much data for the world to see. And they’re willing to trade the extra half a million the house might fetch in a heated bidding war for the peace of mind that comes with privacy. “I try to make sure clients understand it doesn’t necessarily help them price-wise,” agent Nina Hatvany says of pocket listings. “It’s nice for other reasons. But does it get you the price? Probably not.”
