Hush-Hush Home Sales
Every once in a while, a seller might ask us to let our possible buyers clients know that they’ll be selling their house soon. Usually their idea is that the house is not quite ready, or their circumstances are not yet to the point that they are ready for a full-throttle marketing effort. Generally, we counsel the sellers to take their time and hold off on entertaining one or two potential buyers in favor of waiting for the real marketing effort that we provide.
Essential within any agent’s marketing plan is listing the house with Multiple Listing Service, the cooperative database that is aggregated into almost every online real estate site. Marketing a house is about capturing the widest possible buyer pool and advertising the strong points of the house with the great photography and descriptions. Sellers will get the best price, terms, and conditions for their prized asset by wide exposure and sharp pricing, hopefully resulting in a bidding war. One buyer making a deal in a vacuum will not feel the same urgency of a buyer operating within the usual dynamics of a market.
However, there are exceptions when a quiet match might just work out. The sellers of this Concord house had accepted a career change within a year of purchasing their dream house. There was going to be difficulty parting with it, as well as the actual logistical changes that meant the house could not be put on the market for a few months. As serendipity had it, we had just started working with someone I felt would love the house. The prospective buyers did not yet have Concord on their radar, but they were open to it. It’s a beautiful, historic town. Who wouldn’t at least be “open to it?”
They fell in love with the house, and the deal came together.
Here are things to be aware of when considering whether to market your house to the hilt or go a quieter route:
- Commission: In the case study above, the sellers would have been hiring us at our full commission rate if we were going to fully market their house. But when they asked me if we had any buyer clients, we discussed alternatives and arrived at a commission that would be half of our usual in exchange for reducing what their planned listing price would be if it were on the market in earnest later on. I worked with them on a market analysis before arriving at the base price. So, the house was offered at a discounted price for a buyer client.
- Exclusive buyer clients: Such buyers agree to work with one broker in any given market area for an agreed-to period of time. Most good buyer agents will only work this way. These agreements include a clause about compensation in the event that a threshold co-brokerage commission is not met by the seller’s listing agent. In most cases in the western suburbs of Boston, a seller agrees to pay their agent 5 percent, 2.5 percent of which is subsequently offered to a buyer’s agent via a compensation section in the MLS listing for the home. If, say, a buyer agent has an agreement with a buyer for 2.5 percent, this would be paid out of the seller’s side of the proceeds of the closed sale. But if the seller and/or their agent is offering anything less, the buyer would ultimately have to make up the difference or include a contingency in their offer that requires the seller to make it up.
- Dual Agency: Both exclusive buyer and listing agreements generally include a clause that allows dual agency. In the case study above, my partner and I acted as dual agents, essentially neutral brokers who were acting in the equal interests of both principals in the transaction. Make no mistake, this is a tenuous proposition and not one that we undertake regularly. I caution both parties to proceed carefully. However, an experienced and ethical broker will have the ability to navigate the waters to help facilitate a deal that both sides feel is fair. In the case study, there was an agreed-to price, the asking price, but their were some tricky quirks that had to be negotiated.
- Office Exclusives: Another discreet type of non-MLS, exclusive listing would be what is called an “office exclusive,” when a seller, usually of a high-end home in no hurry to sell, signs an agreement to pay a full commission if the listing agent sells it on their own, or if someone in their office has a buyer and sells it. The agreement is that the listing agent will let brokers in their office (and perhaps other colleagues in local offices) know about the listing via word of mouth. These are not entirely uncommon. In fact, we are seeing more of it as sellers, wary of leaving their house exposed online for months or years, are testing the market.