Finding houses for sale before a listing agent adds on their commission is an advantage to our client for two reasons:
- Commissions are included in the sale price of all MLS listings. The seller pays it at closing; the buyer pays it as a cost of buying the house in their monthly mortgage. Finding a For-Sale-By-Owner house often yields a smaller commission built into the sale price.
- A house that is not fully marketed can lead to a lower sale price. Less competition is to a buyer’s (my clientโs) advantage.
An unlisted property for sale is rarely to the advantage of the seller. Sellers have an edge when more buyers compete for the house. In a market like our current one, bidding wars are encouraging buyers to pay more, and in some cases, to waive their basic rights.
Yet there are sellerโs agents who encourage sellers to sell their houses before fully marketing it. I donโt understand how a sellerโs agent can justify not fully marketing a property. (That’s what they do when they keep it off the Multiple Listing Service.)
The Multiple Listing Service was set up so that brokers could cooperate to get the largest number of qualified buyers into a house. If sellerโs agents always knew a buyer for every house, there would be no Multiple Listing Service. But in a sellerโs market, the selfish prosper, to their clientsโ detriment.
Recently, Nerd Wallet interviewed me on this subject.
So how do we find these not-listed properties?
Networking, networking, networking! You know someone who knows someone else โ and on down the line until eventually a contact knows someone with a place youโd be interested in.
You should have it out on Facebook what youโre looking for. If youโve got a listserve in your office, you put it out: โI want a three-bedroom condo in Belmont.โ And when the next-door neighbor of the guy in shipping comes in to borrow a tool and says โBy the way, Iโm selling my condo and itโs three bedrooms in Belmontโ โ thatโs how you do it.โ
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