The MLS is a tool for sellers and buyers in the real estate market, but sometimes a home does not always find its way to the MLS and instead finds its way from seller to buyer via other means. Pocket listings, pre-listing sales, and non-MLS listings are considered hazardous ways to work the market.
The advantage of a broker selling a property in these manners, some might argue, is to gain more of the commission or keep the property within the agent’s office for their own advantage. When properties are sold this way, they are possibly not given the fair and proper exposure to the public and oftentimes these homes see fewer offers and obtain a lower sales price. However, they sell much, much quicker.
When the government takes action, you know that harm is possibly affected by not giving a home a proper listing period. Fannie Mae now requires an MLS listing for five business days before approving short sale offers. Some might argue that it is discriminatory to not post a home on the MLS because by doing so, certain people are denied accessibility to bid on the property.
Privacy concerns may come into play with listings not posted on the MLS, but risks are inherent and all parties involved typically get everything in writing. This might be the case for high-profile homeowners – such as an athlete or celebrity.
Pocket listings are becoming less common, as the ‘Coming Soon’ signs are essentially taking their place. Some pocket listings might involve a home currently rented out; with the broker knowing the house will come to market once the tenants lease nears the end and plans on moving out. If they have a suitable buyer before then, it might just be the perfect home for the perfect buyer with less than perfect timing.
Brokers often sell Pre-MLS listings after marketing to other brokers in their own firm and other local firms. Clearly, their marketing of the property is working and if another broker has just the right buyer for the home, a sale of the property before it goes to MLS is not uncommon.
While forgoing the MLS may be more common, many homeowners do not choose to forgo a licensed broker. Having a professional’s objective and collective experience can guide the process, whether selling or buying. As for dual agency transactions – whereas a single agent acts for both the buyer and the seller – they can often hurt a homebuyer, home seller, and agent or brokerage firm if the deal goes bad.
Some brokers argue that the system of selling homes is outdated and has operated the same for the past several decades. The method by which homes are sold needs to catch up to the technology savvy and swift consumers of today. Additionally, the average Canadian moves thirteen times in their lifetime, up significantly from the frequency in which residents moved 50 years ago. Mom and dad’s home of yesteryear is still standing and happily occupied by them, but mom and dad’s house of today will long be gone, many times over, before the kids are even off to college.