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Brian Dougherty
How do you stay competitive as an increasing number of sellers choose to sell their homes off the market?
According to a recent study on the Boston real estate market, the number of new public listings in the Greater Boston area has seen a decrease since 2018. A major factor in explaining this phenomenon is the incentives for both buyers and sellers in keeping listings off-market.
For real estate professionals, this trend can seem daunting, but there are effective approaches to increase your chance of success in a climate favoring off-market transactions.
Perks and Perils in Staying Off-Market
In today’s age of abundant information, it can seem nearly impossible to grant clients, particularly high-net-worth clients, with the discretion and security they desire.
For some clients, an off-market transaction may be the only option. Consider the circus of speculation that followed the news of Tom Brady’s house going up for sale. That same level of consumer speculation could do damage to a company’s stock and reputation following the public listing of a corporate executive’s property.
With public listings, sellers may also feel they are risking their privacy – and potentially their safety – as their addresses and detailed photos of their homes become widely available to anyone with access to the internet.
While this concern is most commonly expressed by high-net-worth sellers, average sellers may also feel a sense of uneasiness about sharing such personal information. Keeping listings private allows sellers to protect delicate information and to transact without undesired attention or publicity.
For both buyers and sellers, off-market listings also allow for a competitive edge. Showing potential buyers a home before it goes on the market allows them the opportunity to get in first and see the property before the masses arrive. Buyers can then make an immediate offer without worrying that someone else has beat them to it.
For sellers, an off-market sale allows for a more direct connection with the audience most likely to purchase their home. While public listings may be made available to more people, many of those viewers won’t be seriously interested in buying that particular property. Instead of casting the widest possible net that includes mainly buyers not interested in a given home, off-market listings create more effective links between sellers and seriously interested buyers. This more personalized approach allows for a successful transaction to occur more efficiently.
An off-market transaction also allows sellers to attain their version of a “best result.” The best result for a seller does not necessarily mean the absolute highest dollar. While highest price is often considered the most desired outcome, there are sellers that value convenience, time and privacy more than the ultimate sale price.
Keeping properties off-market, however, can prove to be a massive hurdle for both the agents aiming to sell a property and the agents representing clients looking to purchase a new home.
With off-market homes, listing agents are casting a smaller net of potential buyers, as private listings are harder to gain access to. On the other hand, buyers will need an agent with access to as many properties as possible, including off-market listings, to increase the chance of finding their dream home. The most effective way to overcome these obstacles is through successful relationship-building.
The New Importance of Relationship-Building
While networking has long been an important pillar in real estate, the growth of off-market transactions has made it more important than ever.
The only way to gain access to off-market listings is by knowing the listing agents and the only way to get the word out about your off-market listing is by communicating with an established network of real estate professionals. Without strong relationship-building skills, real estate professionals just can’t expect to stay competitive in the 2020 market.
One of the most efficient ways to gain access to a network of reputable agents is through partnership with a private brokerage. A private brokerage provides high-net-worth individuals, families and their advisors with access to the most personalized, sophisticated and confidential real estate support available. These services utilize a concierge-style approach to fulfill any client request and aim to deliver outstanding results.
The basis of successful off market transactions boils down to matching a buyer’s property interests and relevant existing homes. As Boston–area buyers become rightfully frustrated with the lack of relevant inventory and huge competition for properties that are of interest, agents need to have a strong ability to leverage trusted contacts to produce off market options that match the buyer’s desires.
For partnering agents, private brokerages allow access to other real estate professionals in a curated form. In the age when essentially all the content we consume is personally curated, why shouldn’t networking function the same way? By joining a private brokerage, agents can be confident that members of their network uphold equally high standards of work and value the same elevated level of discretion to ensure the creation of exceptional client satisfaction.
A lower number of public listings in Boston doesn’t have to mean more difficulty in buying and selling homes. Instead, allow this lower inventory to encourage you to take a new, more efficient approach. Practicing effective relationship-building and creating a stronger network of like-minded industry contacts will empower you to continue to succeed in the face of the 2020 Boston realty market.
Brian Dougherty is managing director of Compass’ Boston office and leads its new private brokerage division.
