Who benefits from an agent selling your home before it's on the MLS: You or the agent?
Written by Glenn Necklen
Many Real Estate agents promote selling a home before the listing "hits the market". These agents claim to leverage a private broker/agent network that can deliver potential home buyers - without the hassle of listing and marketing the home on the Multiple Listing Service (MLS).
In these situations, the agents often never get a signed listing agreement, or they include a special listing addendum allowing the agents to withhold the property listing from the MLS, yet market the home to these so-called "private" or "exclusive" networks at predetermined prices and commission rates.
What agents and home sellers considering this strategy need to ask themselves is: Who really benefits from this tactic: The agent or the home seller? To answer this question, we have to compare this process to, instead, listing the home on the MLS and marketing it to the ENTIRE Real Estate community AND general public- all before considering a buyer offer.
The main goal of marketing a home for sale is to present the home in the best possible light, to the most people possible, to get the most exposure, which then drives up interest in the home. The law of supply and demand dictates that the more interest there is in a product, the more the product is worth, right?
Selling a home without listing it in the MLS and marketing it to the general public significantly diminishes the potential exposure a home will get. Furthermore, the home will likely acquire limited interest- which can lead to the seller not getting the best price. This logic is undeniable!
To effectively represent the BEST interest of a home seller, an agent would EXPOSE THE HOME TO AS MANY AGENTS AND PEOPLE AS POSSIBLE TO ACHIEVE THE MOST INTEREST, DEMAND, AND ULTIMATELY THE HIGHEST PRICE. This after all, is the main reason why agents are hired by home sellers in the first place isn't it?
The truth is, agents are the ones who benefit most from selling a home before marketing it to the masses. Although these agents can sometimes sell homes faster using this strategy, they usually end up spending less time, effort, and marketing money. Therefore, they stand to profit more on these transactions - despite their sworn duty to put the seller's interests ahead of their own. Real Estate agents should never put their commissions ahead of their client's money. They teach that the first day of Real Estate school.
Glenn Necklen is Broker / Owner / REALTOR at Necklen & Oakland- Professional Real Estate services in Maple Grove, MN.