The off-market sale…why it’s not such a good idea.
“I hear you’re bringing a level-living home to market next year,” my colleague inquired, “would your Sellers consider an off-market sale now?”
“Hmmm . . . if it was EXTREMELY compelling, they probably would,” I said.
However, in these instances, I’m generally a skeptic.
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The personal stories of one Realtor’s battles and triumphs in the highly-competitive Bay Area Real Estate Market, seeking to illuminate and humanize the very real ups-and-downs of homeownership.
Why there may be less profit for the seller
The problem is that when prospective Buyers view a property in its “before” state (meaning with the Sellers “stuff” in place), they can rarely see past the antique furniture, the dated paint colors, or the worn carpet, and this is where we typically lose them.
The truth is, no matter what prospective Buyers say . . . most of them CANNOT envision the house in the “after” incarnation, which means they invariably walk away from the “sneak peek,” disappointed OR looking for a good deal. If they make an offer, it’s usually at a deep discount. Worse yet, when the property IS ready for prime time, they rarely return, having previously formed a less-than-stellar opinion of the house and its value. (That’s not good.) So while off-market sales, “theoretically” seem like a good idea, they seldom ever play out that way.
By way of example, we recently represented a classic Piedmont home where the Sellers explicitly preferred an off-market sale. (To the Sellers, private sales avoid the expense and inconvenience of moving out and getting the house ready, AND they have the added bonus of knowing exactly what their net profit will be as they hunt for a replacement property.) With assurances from our colleagues that the “Buyers had great vision,” Sarah and I set up a few limited showings.
True to form, both parties offered $500,000 LESS than the Sellers had indicated they would take in an off-market transaction. At this point, the Homeowners gave us the green light to do what we do best and transform the property post-haste. With Jill as the lead, we replaced the hardwood floors, painted the interior, replaced lights, dressed up the landscape, and professionally staged the home. Now looking GORGEOUS, the market responded in kind . . . and the result surpassed the Sellers original expectations.
In fact, having invested approximately $75,000 into pre-market preparations, the property sold for $600,000 MORE than the earlier offers.
Such is the power of fully exposing a home and showing it in its best light.
Did we earn our commission? Absolutely – and then some. (Just ask the Sellers.)
Remember, homes are EMOTIONAL purchases; they’re not practical ones. Taking the time to create the narrative almost always pays off with huge dividends, and aligning yourself with Agents who can confidently curate that journey is no small feat. (That’s where we come in.)
“How much is the difference?” That’s hard to quantify as most homes won’t go through the process of an off-market vs. an on-market scenario (as this one did), but suffice it to say that the difference can be SIGNIFICANT (or we wouldn’t put you through the trouble).
Putting aside the greater potential profit you are likely to reap with an “on-market” push, off-market sales can be inherently tricky as the home hasn’t been “market-tested,” meaning the Sellers won’t know if they could have garnered more, AND the Buyers won’t know if they could have purchased the house for less. In other words, off-market sales are for those who feel comfortable with uncertainty; who will never second-guess their decision, and who can avoid the peer pressure from their friends who think they know better. (They don’t.)
Listen, it’s your house and you may certainly do with it as you wish, but from where I sit, sneak peeks tend to backfire more often than not. Having said that, when private sales work; they can be an elegant solution. In other words, we’re not uniformly opposed to them, it’s just that all the pieces need to fit neatly together to make off-market sales fly.
And on that note, we’re onto the next project. If it appears that we’re encouraging, persuading, and BEGGING you to let go, trust the process, and allow us to work our magic, it’s because we speak from experience (we’ve been here before), and frankly, we’re VERY good at our jobs (we’re transformation specialists!) We know you’ll be pleased with the results, AND we are confidant the numbers will prove it.
How can we help you?
Julie Gardner & Sarah Abel | Compass Realty
Not just Realtors, but consultants in all things house and home, we’re here to educate, explore, examine and refer . . . In short, you may count on us to take care of your home as if it were our own and anyone who knows us, knows we take pretty darn good care of our homes.
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