Posts By Category:

Marin off-market home sales a hot topic

April 15, 2014

Susie Gamble looked for a house in Corte Madera for 10 months, but kept losing out in bidding wars. Then, in March, her agent learned of a Craftsman home that was not yet on the market and took her to see it. Gamble made an offer and her offer was accepted. "It was all really easy. We didn't have to go through a lot of jumping through hoops and negotiating. It was very quick," said Gamble, who bought the house five days before she left the country on a trip to Peru. Sales of homes that haven't been entered into the Multiple Listing Service, also known as off-market sales or pocket listings, are a hot topic these days in Marin and the Bay Area. Such sales make up an increasing percentage of real estate activity in some parts of the Bay Area, and appear to have edged up slightly in Marin in 2013 compared with 2012. In 2012, a total of 3,181 single-family homes and condos sold in Marin, according to the Marin County Assessor's Office. That year, 2,997 homes sold through Bay Area Real Estate Information Services, the MLS serving Marin and the North Bay. Though this is just a rough estimate, the numbers suggest that around 184 homes, or 6 percent, sold off-market. In contrast, in 2013, the assessor reported 3,452 sales, while 3,148 sold through the MLS. Hence, somewhere in the neighborhood of 304 homes sold off-market, about 9 percent, though this number does not account for factors such as sales between family members or neighbors and the like. Gamble said she was pleased with the outcome of her off-market purchase. "I got to stay in Corte Madera, where I have lived for 25 years and raised my daughters," Gamble said. "They offered the house at a certain price, I countered and then we agreed on a price. It worked out great." "Because Susie made an all-cash offer, the sellers didn't have to worry that the deal would fall through because of problems with the loan," said Bob Ravasio, Gamble's agent, who learned about the house in conversation with another agent. "You had a case here where everybody's needs were met. The seller got the price they wanted without having to go on the MLS." The usual procedure in selling a house involves the agent listing the property with the MLS after signing a listing agreement with a client. Agents generally pay an annual fee to the MLS for listing their properties, and must list the home within a few days or else file an exclusion agreement signed by the client granting permission to withhold the listing. "If you put a home on the MLS, Marin's 1,400 agents will see it, and it will get maximum exposure," said Marin agent Patti Cohn. "The MLS is the first and best way to market a home, but there are absolutely clear and valid reasons to market the home outside the MLS system," Ravasio said. Susie Gamble gets into her car in front of her new house on Tuesday, Apr. 8, 2014, in Corte Madera, Calif. She bought the house off-market. It was never Susie Gamble gets into her car in front of her new house on Tuesday, Apr. 8, 2014, in Corte Madera, Calif. She bought the house off-market. It was never listed on the Multiple Listing Service, which for decades has been the primary source of information about homes for sale. (Frankie Frost/Marin Independent Journal) Frankie Frost At the moment, Cohn is handling two such sales, one of a $9.75 million duplex in Sausalito and one a $1.2 million Sleepy Hollow home. In the case of the duplex, Cohn said, the sellers wanted to sell off-MLS because there are tenants in both units, and trying to arrange showings would have been onerous. The Sausalito client was adamant about selling off-market, Cohn said. As for the Sleepy Hollow client, "I put it out to the top 10 percent of agents in Marin via (agent online forum) Top Agent Network, and 14 agents responded," Cohn said. "Many times, sellers can get a better price (off-market) by getting a preemptive offer from a buyer who is willing to pay what is asked and grateful for the opportunity, given today's competitive market," Cohn said. "Some clients are concerned about privacy and don't want a lot of people going through their homes (during open houses)," Ravasio said. Other owners cringe at the thought of preparing their homes for sale, Ravasio said. The process can easily run $10,000 to $20,000 just for painting and repairs, clutter must be cleared and "the house must look pristine," Ravasio said. This may help explain why off-market sales jumped between 2012 and 2013 in Santa Clara, San Mateo, Santa Cruz, Monterey and San Benito counties, the service area of MLSListings Inc. "Within our five home counties, 2012 was about 15 percent off-market and in 2013 it jumped to about 20 percent. It's definitely an increasing practice ... It's not going away, but there are definite pitfalls," said James Harrison, chief executive of MLSListings. In Marin, "it's (off-market sales) happening more often," Cohn said. "It's easier to sell off-market these days because there is a strong seller's market and agents are networking with each other more." Two online agent networking sites are Top Agent Network and Producers Forum. The former facilitates communication between agents in the top 10 percent of their respective markets, including Marin. Founder David Faudman estimates that about 30 percent of the discussions involve off-market listings. "Pre- and non-MLS marketing of properties has been going on for decades," Faudman said. "The MLS is a critically important marketing tool. We're not in any way, shape or form trying to replace that. We take care of the period before it goes on the MLS, when it used to be whispered to a handful of people and now it's broadcast to a greater number of clients." With Producers Forum, "We aggregate non-MLS data and buyers. We are complementing the MLS," said founder Eric Trailer. Agents can access the site for free. "Putting a listing on the MLS gives it maximum exposure," Trailer said. "Whether it means higher prices has not been proven." "This whole off-market and non-MLS or pocket listings (issue) has been a big controversial story all over the country," Faudman said. "It's (off-market sales) a sensitive subject across the industry," said Blaine Morris, president of the Marin Association of Realtors. "I had a listing, showed it to buyers who made an offer and were ultimately willing to pay $12,500 over asking price before it went on the MLS. The seller wanted a little more. The buyers tired of the negotiation and backed away, so the seller put the property on the MLS, got five offers, and got $67,500 more than the first buyer's best offer, and it was a cash offer," Morris said. The California Association of Realtors' position is that off-market sales negatively affect sellers' chances of getting the best price. The association last year added a section to its residential listing agreement promoting the benefits of the MLS and warning against opting out. Sellers and brokers must initial the warning. The agreement is not required for California agents, but is widely used. Ravasio said, "Our (agents') job is to represent our clients' best interests and goals." Off-market buyer Gamble said, "I think it's a nice way for everybody to do it if you can. I was really happy to relax and go on my trip, knowing I had a home to return to." Smiling, Gamble added, "Now I have to get moved." Contact Janis Mara via email at Follow her at Twitter.com/jmara. Source: http://www.marinij.com/marinnews/ci_25542149/marin-off-market-home-sales-hot-topic