Check out these four tricks used to get you to spend more (without you knowing it).
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One of the biggest challenges facing home buyers today is the lack of homes actually up for sale. At one point in 2011, the housing market was glutted with a 12-month supply of homes. Now, it’s hovering between three and five months. That translates into almost 1.5 million fewer homes on the market nationwide.
The number of available homes can be even tighter in some individual markets. Homes you ask your real estate agent about on Thursday could be snapped up before you get a chance to see them on Saturday. Sometimes it seems like the only way to finally buy a home is to have a contract on it before anyone else knows it’s for sale.
Insider Information Is A Real Thing
You may be right about that. Real estate agents commonly share information about new listings before they add them to the Multiple Listing Service (MLS) database where all agents and buyers can see them.
“We do a find a lot of success in letting other agents know as soon as we have a hot new listing that we know will go fast,” Nashville, TN, real estate agent Tara DeSelms said. “We have about 30 top-producing agents who consistently work with hundreds of buyers, so why not market it to the top agents first?”
Local experts you can trust.Find an ELP
A home that sells before it’s added to the MLS is sometimes called a pocket listing, and it can actually help homebuyers find that hidden gem and finally buy a home of their own. It’s one of the benefits of working with an experienced real estate agent who’s built relationships with other great agents in their market.
Kansas City real estate agent Robin Krieger has a word of caution for buyers who decide to pursue this type of listing: “Buyers can be fearful of losing the home to someone else, and that makes them offer too much sometimes,” she said. So take enough time to do your research on a home’s true value before you make your offer to avoid paying more than you have to.
Other Ways to Stay On Top Of Your House Hunting
Clearly, not everyone will land their home this way, so Janette Friend-Harrington, agent from Austin, TX, offered a few tips to help buyers who are dealing with the trials of a housing market with limited inventory.
“Ask your real estate agent to help you set up a search in the MLS, so it will notify you the moment a new home in your price range hits the market,” she said. It’s also helpful to regularly tour your favorite neighborhoods looking for new homes for sale.
An experienced agent who knows how to write a winning offer is also essential. “It’s much more than just offering the highest price,” Janette said.
The Other Side of the Coin: Selling a Pocket Listing
We can’t talk about pocket listings without addressing the pros and cons for sellers as well.
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The practice above of “pre-marketing” a home before the listing agent adds it to the MLS is not technically a pocket listing. In a true pocket listing, the seller agrees—usually in writing—to keep their listing out of the MLS completely, and they depend solely on their agent to get the word out about their home through other, less public avenues.
Celebrities and other public figures favor pocket listings because they like the privacy, and their agent decides who actually gets to see their home. But these listings have grown in popularity among regular folks, since a pocket listing means they don’t have to go to a lot of trouble to get their home ready to sell or keep it neat and tidy for unexpected showings.
Not A Great Idea For “Regular” Folks
But our real estate experts said they rarely see any benefit to the seller. “Overall, a pocket listing isn’t easy to sell,” Robin said. “They generate a few calls. But once a home goes into our MLS, we are swamped with calls and contracts, and it generates a higher price.”
A recent comparison of off-MLS listings and MLS-marketed homes shows homes that show up on the MLS averaged a 17% higher sales price. That’s a considerable chunk of change when it comes to the largest asset you own!
If your agent suggests a pocket listing, make sure you understand and agree with their reasons why. And, if you find that keeping your home hidden away from most buyers isn’t working out, don’t hesitate to contact your agent and have them add you to the MLS as soon as possible.
Whether you’re a buyer or a seller, a good real estate agent is essential in today’s challenging market. If you’re looking for an agent whose advice you can trust, we can put you in touch with a high-energy, high-octane agent Dave recommends in your area today.