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Some see off-market listings as a critical business strategy for perpetuating the concept of exclusivity in the luxury market.
Others brand them a violation of basic real estate ethics as well as the idea that an open, free market is always best for the seller.
But how do you balance what a privacy-driven luxury seller wants when it’s a clear break from MLS rules and general industry standards?
“Some sellers think if it’s off the menu, it’s more interesting,” said Coldwell Banker’s Carrie Wells at Inman Luxury Connect. Wells is an agent in the tony, woodsy Colorado resort towns of Aspen and Vail. “But you lose exposure, and the market can change dramatically.”
Wells said she is handcuffed by a couple of things, one being the seasonal nature of Rocky Mountain weather compressing 60 percent of sales into the short summer, requiring her to market quickly and loudly. But more restraining is the rule her MLS has in place that any listing must be submitted within 24 hours of being advertised.
Carrie Wells | AJ Canaria
“Our financial duties are to the seller, and if they don’t want it in the MLS, and they want it in The Wall Street Journal, we have to honor their wishes,” Wells said.
Once it’s published though, the MLS rules kick in, and Wells risks upsetting a client. That’s a tough spot.
In order to market a property that is being so carefully guarded, and in some cases not published anywhere, Wells shared that her team worked with technology and website development firm Luxury Presence to watermark every property image and link them to a unique tracking URL, allowing them to know when a photo is opened and shared by a registered user.
Like Wells’ watermarking tactic, Ariana Gaffoglio, with Official, has a client making it hard to sell by requiring an NDA (non-disclosure agreement) be signed for even a moderately interested prospect.
“I have a weekly call with them, they seemed fine the first couple of weeks, and now every week it’s ‘What are you doing for us?’ Well, I’m calling agents, but I can’t do anything more, and the clients are getting frustrated,” Gaffoglio told the audience.
Off-market listings are common in Gaffoglio’s Orange County.
“Clients want to keep their privacy and think they’re going to drive a higher value, but we tell them that they’re doing themselves a disservice by not letting us market it, by not reaching international buyers who may be able to add another $10 million.”
The conversation about marketing with sellers at this level is different, they demand a lighter touch, but Gaffoglio said she isn’t afraid to have the hard conversations.
Ariana Gaffoglio |AJ Canaria
“They’re hiring us for a reason — why do they want us to help them sell their property?” Gaffoglio said. “I tell them, they’re not allowing me to do my job, and I always follow up with an email after [a meeting] so I can show them what we talked about.”
Wells said she’ll suggest clients test the waters first and let her work her networks off-market. Agents do this to get feedback from colleagues so when it does hit the open market, it’s acutely positioned.
In an interview with Inman, Joe Rath, Redfin’s senior director of brokerage operations and head of industry relations, said pocket listings remain prevalent market-wide. Clear cooperation, an industry term for the baseline of deal transparency between parties and abiding by MLS guidelines on property marketing isn’t the solution many thought it would be, according to Rath.
“I think clear cooperation in its current form promotes the behaviors it was really intending to discourage,” he said.
Rath refers to an industry loophole that allows large brokerages to share listings within internal networks, justified by the volume of agents within them and their subsequent network of qualified buyers.
“Some of the brokerages coast to coast are so big that the listings never get to see the light of day,” Rath said.
Wells and Gaffoglio shared that moments before stepping on stage; they “made a connection.” Panel moderator Inman’s Jim Dalrymple II asked them to elaborate.
“I was meeting Carrie, who works in Aspen, and I told her I have a client looking with an open budget,” Gaffoglio said. “I showed her a picture of what he wants, and she said she has the perfect listing.”
“You never know,” Wells said.
