This week’s Q&A column is written by David Howell, Executive Vice President and Chief Information Officer, of McEnearney Associates Realtors®, the leading real estate firm in Alexandria. To learn more about this article and relevant market news, contact David at 703-738-9513 or email [email protected]. You may also submit your questions to McEnearney Associates via email for response in future columns.
Question: Are there benefits to listing my home on the MLS vs. selling it privately?
Answer: In today’s hot real estate market, some sellers may be tempted to sell their home privately, though a private sale does not include full exposure to the market through the multiple listing service (MLS), the internet, and the thousands of agents and brokerage companies who work in this region. We’ve heard a number of possible reasons for wanting to do so, including convenience, privacy and security.
At McEnearney Associates, we believe homeowners have the right to make that decision. We also believe that it is crucial to be informed, and sellers should fully understand the implications of listing privately when making their decision. The simple fact of the matter is — regardless of the listing company — sellers almost always benefit from full market exposure, and the data validate our conviction.
BrightMLS, our regional multiple listing service, recently completed a two-year study looking at almost a half-million sales and analyzing the results of “off-market” sales vs. those sold through the MLS. To help ensure objectivity, the study was guided and validated by two Ph.D. economists who have no ties to the MLS. The results are conclusive.
The study showed sale records of homes that were sold through the Multiple Listing Service and promoted to the entire BrightMLS network of 95,000 real estate professionals, concluding that these homes sold for higher prices than homes sold off the Multiple Listing Service. The median sales price for homes sold on-MLS was 16.98% higher than homes sold off-MLS. Similar results are demonstrated across BrightMLS’s three major Metropolitan Statistical Areas (MSAs) of Philadelphia, Baltimore and Washington, D.C.
As a subset of off-MLS sales, Bright analyzed “private sales,” which are defined as office exclusive listings promoted only within a brokerage office or company. Those office exclusives make up a small percentage of transactions, and nearly two-thirds (63%) ultimately end up not selling off-market and are instead promoted through the MLS. Like the findings from all off-MLS sales, homes marketed on the MLS sold for a median sales price of 16.84% more than those marketed through office exclusive arrangements. Additionally, those office-exclusive listings typically took longer to sell: Homes entered into the MLS from the start went under contract faster than properties that started as an office exclusive and were later marketed on the MLS.
It’s stunning that the results are so similar and so compelling.
Now, doesn’t this stand to reason? No individual agent or company has access to all of the buyers or even the majority of the buyers. Thus, in a time of record-low inventory, does it make economic sense to artificially restrict the number of buyers who could be interested in a property? To intentionally curb the demand side of the supply and demand equation?
Furthermore, we believe it is in the best interests of our clients to provide all qualified buyers equal access to all homes on the market, not only to protect equal housing opportunities but to ensure that they maximize the value of the investment in their property.
We’ll leave you with the following two questions:
- Is almost 17% a big price to pay for the perceived “convenience” of selling off-market?
- Who benefits most from an off-market sale — the seller or the listing company?
Read the full Bright On/Off MLS Study on our website.
If you would like a question answered in our weekly column or to set up an appointment with one of our Associates, please email:Â [email protected]Â or call 703-549-9292.
McEnearney Associates Realtors®, 109 S. Pitt Street, Alexandria, VA 22314. www.McEnearney.com Equal Housing Opportunity. #WeAreAlexandria
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