Are you missing out on privately marketed listings?
Did you know that a significant portion of Austin homes are actually sold by Realtors off market as private listings? In fact, of the 1,448 Austin homes for sale for $1.5M or above in late July, 623 of them were marketed privately across three major off-market portals. That’s 48% of the market being sold outside of the Multiple Listing Service (MLS).
Of course, there are numerous ways to sell a home, like having your Realtor advertise the home on listing share sites like the MLS, doing it yourself as a For Sale by Owner (FSBO), utilizing a large aggregator like Zillow and Redfin that publicizes the MLS listings, or even trying some of the new instant offer companies. But if you are trying to buy or sell a home in Austin, off-market listings need to be on your radar.
First, let’s understand the difference between the major methods of selling a home.
The bulk of Austin homes for sale can be found on the MLS operated by the Austin Board of Realtors. Here’s how it works. Most Austin Realtors agree to input their listings into the MLS where those properties can be seen and searched by other Realtors with access to the MLS. Realtors also have the ability to share search results with their clients, and a good Realtor will sift through the hundreds of available listings to find homes that meet a buyer’s criteria. The general public, however, cannot directly access the MLS.
That’s where third-party aggregators like Zillow or Redfin come in. These sites often have agreements with the MLS which allow them to access and re-post the MLS listings on their third-party sites. As a result, these aggregators end up being a backdoor for the general public to see what is in the MLS. These aggregator sites may also share listings from other sources like For Sale by Owner. But even the aggregator sites are not a one-stop-shop – they only feature listings by agreement, and not all companies or Realtors allow their listings to be syndicated to these websites.
In addition to all of these portals, there are also homes available for purchase that are not publicly listed for sale. Called off market homes, pocket listings, hidden homes, private exclusive, or quiet market, a large portion – almost half -- of Austin home sales are occurring outside of the MLS or the aggregator sites. This sales method is most common in areas with higher sales prices. To sell these homes agents utilize portals built to showcase private listings locally and nationwide. Agents also rely on their personal networks to get these homes exposure.
In Austin there are three major portals for searching private listings. Two of those portals require an application and a membership fee. The membership fees are high, and some agents don’t meet the prerequisites to participate in these exclusive groups. That means that if your Realtor isn’t a member of those groups, you may not be seeing all the properties that fit your search criteria.
How many Austin homes are sold privately off the MLS?
There’s not a perfect way to calculate off market data. Since these sales are not tracked by the Austin Board of Realtors, we did our own sleuthing. Excluding any private listings on brokerages sites that are only available to agents and clients within that brokerage, here’s how the off-market listings broke down for listings priced over $1.5M in late July in the three private portals:
- 359 homes were featured on an exclusive local networking group for homes priced $1.5M+,
- 204 homes were on a local portal that does not charge a membership fee, and
- 29 homes were on a national network that shares off-market properties nationwide.
Some neighborhoods are more likely to have off market listings than others. As you might expect, off market sales are higher in more affluent areas of Austin. Consider the off market sales in these popular neighborhoods as of July 27, 2023:
- Westlake Hills: 114 private listings + 120 MLS listings = 49% sold privately
- Northwest Hills: 6 private listings + 18 MLS listings = 25% sold privately
- Central Austin: 179 private listings + 857 MLS listings = 17% sold privately (Brentview, Crestview, Hyde Park, Pemberton, Rosedale, Tarrytown, 78704)
- Lakeway: 31 private listings + 165 MLS listings = 16% sold privately
But how effective are off market sales?
It’s hard to measure the effectiveness of off market sales since they aren’t tracked along with the public sales data in the MLS and very little sold information is available in the portals themselves. Most notably, we lack data on how long these private listings are on the market or where the final sales price landed.
While real data is lacking, we can say anecdotally, however, that the percentage of sellers and buyers we are personally helping with off market sales is increasing. In many cases the off market properties meet a need that isn’t being satisfied in the MLS. We have one buyer closing later this month, for example, that wasn’t finding anything that sparked interest on the MLS. By working our personal network and scouring the private listing portals we found many more options and ultimately “the one” for this family.
Why are off market home sales such a popular method for selling homes?
Sellers choose the off market route for a variety of reasons. Some sellers want or need the added privacy and control over showings that comes from being off market. Off market sales often include an added layer of vetting potential buyers by requiring proof of funds prior to showing. The more hurdles in place prior to showings, the less likely sellers are to have their time wasted.
Off market status is also a way to weigh interest and test the potential price before going on the MLS. The negotiation metrics shift as well since without the publicity of the MLS, the seller has less risk if a deal falls apart. The converse can also be true, with homes being pulled from the MLS temporarily to avoid being shopworn or accruing days on market during slower sales cycles.
The downside is that the seller will never know how the full force of market competition would have impacted the final sales price. With fewer people knowing a home is for sale, you significantly reduce the slate of potential buyers. Whatever the seller chooses, he or she needs to be comfortable with the risk.
For buyers, let’s not forget the appeal of exclusivity. Some people are attracted to the feeling of luxury and selectiveness of buying a home that isn’t available on the general market. Similar to a coming soon, this can fuel a fear of loss that generates a sale before the home goes to the MLS. There can also be less competition since fewer people are aware the home is for sale. As an added benefit, none of the portals track sold prices so buyers also get added privacy about their purchase.
How can home buyers find homes that are being marketed privately?
Regrettably, buyers could be missing out on properties if their agent isn’t searching the key spots where off market listings are shared. In Austin’s real estate market, those extra listings can make all the difference. If buyers want to see more of the homes available for sale – especially luxury homes – they should work with a Realtor that has access to these private listings.
When interviewing a Realtor, always ask how they will source properties for you, and make sure they have access to all three of the private listing portals. In the off market arena, Realtor-to-Realtor relationships with other agents matter more than ever; so it can be beneficial to have an agent that has been in the business for a while with contacts across a variety of brokerages.
You don't have to figure it out on your own.
It can be frustrating to realize you aren’t seeing the full array of homes for sale, and it can be even more frustrating to stay on top of these sources on a regular basis. Luckily, it doesn’t have to be this hard. A seasoned Realtor can be worth his or her weight in gold by making sure you don’t miss out on the right opportunity. Our team diligently checks every possible source to find your perfect match. If you want help finding your place in Austin or selling your home off market, reach out for some candid advice and experienced guidance.