San Francisco Chronicle covers Pacific Union Private View
May 23, 2018
Pacific Union will give public a peek at its private listings
Pacific Union International, California’s second-largest residential real estate broker by volume, is launching a new service this week that will give the public a peek at its “off-MLS listings,” meaning homes for sale that aren’t on a Multiple Listing Service.
It’s the latest in a growing number of ways home sellers can test the market — and maybe get an offer — before embarking on a full-on marketing campaign.
Putting a home on the MLS is usually the best way to get top dollar because it provides the greatest possible exposure. But in a red-hot market, some sellers figure they can bypass the MLS — and the real estate websites that repost their listings for the whole world to see.
Currently, agents circulate these “off-MLS” or “pocket” listings inside their firm and with other agents through Facebook groups or email lists. Some share them with groups such as Top Agent Network or Marin Platinum, which restrict their membership to high-volume agents.
Instead of holding a public open house — with strangers and neighbors traipsing through — agents arrange private showings.
Pacific Union estimates that 20 percent of its home sales in the Bay Area and 30 percent in Los Angeles last year closed without appearing on the MLS.
The San Francisco brokerage firm is breaking new ground by giving the public limited access to its own roster of off-MLS listings. Its new online service, called Private View, debuted in Los Angeles this week at https://pacificunionla.com/privateview. It will go live in the Bay Area this summer.
It’s supposed to work like this: Potential buyers enter up to five target neighborhoods and their price range. Once they register their name and email address — and the name of their broker if they have one — they see a list of homes that meet their criteria.
Each home will have a single photo and its city or neighborhood, but no address or other information. They can click on homes that interest them, and their information will be forwarded to the listing agent. That agent should contact them, but there is no guarantee that a buyer will get to see or bid on the home. “There may be some frustrated buyers,” said Nick Segal, president of Pacific Union Southern California.
Mark McLaughlin, Pacific Union CEO, says Private View will help buyers and sellers by giving greater access to his firm’s off-MLS listings: “We are taking secrets in our filing cabinet and exposing them to the public.” He agreed that the MLS provides “maximum exposure,” but for clients who don’t want that, this is “an incredible” alternative.
“Once we get critical mass, I think more sellers will be part of this,” Segal said.
In a market starved for inventory, that may not be welcome news.
Pocket listings have always been used, mainly by celebrities and people selling extravagant homes that only a few could afford. But their use in California has grown since 2013, as the housing market rebounded and bidding wars broke out.
“As inventory goes down, off-MLS practices go up,” said Jim Harrison, president and CEO of MLSListings, the listing service for Santa Clara, San Mateo, Santa Cruz, Monterey and San Benito counties.
He estimates that 21.6 percent of all homes sold in those counties in the first quarter did not hit the MLS before they closed. That compares with 12.6 percent in the first quarter of 2012. (Many agents enter a sale into the MLS after it has closed to help establish comparable prices for an area).
The California Association of Realtors discourages pocket listings. In a 2013 press release, it said most sellers want the highest possible price from a well-qualified buyer, and the best way to get that, the association said, is to put the home into the MLS.
Most Multiple Listing Services are owned by local Realtors associations. Agents who join an MLS generally must post homes on the MLS within a few days of signing a listing agreement, unless the seller signs a waiver.
Every member of an MLS has access to those listings. They also go out to real estate websites such as Zillow and Redfin.
Pocket listings can lead to ethical, antitrust and fair-housing issues, the state Realtors association said in 2013.
Sellers typically pay a commission to their agent, who shares the commission with the buyer’s agent. In pocket listings, it’s easier for agents to keep the entire commission to themselves, or within their brokerage firm or a small network of outside agents.
Agents say there are many reasons to keep a home off the MLS, at least temporarily.
“My preferred way is to market heavily off-market for a week or two, and then go onto the MLS,” said Cathy Youngling, an agent with Paragon Real Estate Group of San Francisco. That way “I have built a level of excitement and enthusiasm” before the “time on market” clock starts ticking.
In the Bay Area, homes are typically being snapped up less than two weeks after they hit the MLS.
“If a house doesn’t sell within two weeks,” clients perceive that there’s something wrong with it or that it’s overpriced, said Pacific Union agent Adam Touni.
Marketing a home privately for a couple of weeks gives agents a chance to test the price before making it public. During this period, the owner may be staging the house, landscaping and doing repairs.
Some Multiple Listing Services let agents advertise properties as “coming soon” during this period, but if someone makes an enticing offer, it may never hit the MLS.
If you can sell a home privately, there may be no need to hire professional photographers and stagers and hold open homes. Some sellers don’t want the public coming into their homes, because they have children or elderly parents living there or they worry about valuables. Some don’t want their homes listed on the MLS because they don’t want employees or family members to see how much it’s worth.
June Barlow, the state association’s general counsel, did not want to comment on Pacific Union’s new venture, but said its statistics show that the more people seeing a property, “the higher the price.”
Harrison said the median price of homes sold on his MLS last year was $180,000 higher than homes in the same five counties sold off the MLS.
But agents say homes sold off-market can fetch higher prices when buyers eager to shut out the competition make preemptive offers.
Stephanie Leveene and Nicol Hammond sold their two-bedroom condo in San Jose in April before putting it on the MLS. They were house-hunting in Hayward, and to make a competitive offer — and come up with a down payment — they had to sell the condo quickly or at least have it under contract. “We had a lot of stuff in the house and it would have taken a long time to prep it,” she said. “Our neighborhood is pretty hot. We said, ‘Let’s give it a try off MLS and see what happens.’”
The couple’s agent, Barbara Lymberis of Coldwell Banker, priced it at $595,000. She shared the listing with every Coldwell Banker office in Silicon Valley and Top Agent Network. She put an ad in a community newspaper and sent email flyers to every agent within a 10-mile radius. “We had one afternoon of showings, and within a day had one offer that satisfied the clients,” Lymberis said.
It was for $620,000, which set a new record in the condo complex, although a month later an identical unit sold for $630,000.
Leveene is happy. “It felt like a whirlwind,” she said. From start to finish the condo sale took five weeks, and they are ensconced in their new home in Hayward.
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