With so much focus on the Multiple Listing Service (MLS) and online marketing, one of the things that doesn’t get brought up in many real estate discussions is the exclusive listing. This blog outlines what the exclusive listing is, along with why people do it and the pros and cons. While listing on the MLS is the much more common way to go about listing a home, if you are aware of the shortfalls of an exclusive listing and have a well-networked realtor then it’s not as bad as many make it out to be. What is an exclusive listing?
An exclusive listing in real estate is a listing that is held exclusively with a real estate agent and is not published on the Multiple Listing Service (MLS). Thus, the realtor is required to market the home to his or her personal sphere of clients, builders, and realtors to find a buyer. This listing will not show up online on either of the realtor or public sites, and therefore typically results in a more private sale.What is the MLS? (The alternative to an exclusive listing)The MLS is the most common way for people to list a home. The MLS is available to all realtors that are a part of a real estate board, and syncs to public home search sites such as Realtor.ca, Zolo.ca, or Rew.ca. Most people looking for homes nowadays view their new home the first time online. Thus, the MLS is the best and most common way to market your home to the largest number of buyers and realtors, and typically results in a transaction involving two realtors: one representing the buyer, and the other representing the seller.
Why do people list exclusively? What are the pros?
There are several reasons why people decide to list a home exclusively, and while there are some downsides to this, there are also positives depending on your circumstances.1. Privacy – Some sellers don’t want their neighbours, friends, and family to know that they are selling their home. Sometimes, the reason for selling isn’t the happiest… whether it be a divorce, someone passing away, or a job relocation. Furthermore, there are many people (we find especially in the luxury market) that don’t want the entire online world to where they live, how much they’re listing for, and how much (eventually) they sell for. Privacy is a major pro when it comes to listing exclusively, as your home is not exposed online and to most real estate agents.
2. Pre-marketing before the MLS – Having an exclusive listing before you plan to list on the MLS can be beneficial because it is possible that your realtor can find a buyer before your property is even listed to the public online. Think of it as marketing it as “coming soon” and gaining the hype and letting buyers know that a house is coming up for sale in the near future.
3. If you’re testing out the market and listing at a higher price than it’s expected to sell – When a property is listed on the market and a price reduction occurs later, this information is available to realtors. They can see how long the property has been on the market for, how much it was purchased for in the past, and what price it was listed for previously. Essentially this tells a story to future buyers, and with that information they’ll decide what price to offer and whether to low-ball. If you know that you’re listing your home for what is probably more than it’s worth, it’s not a bad idea to test out the market with an exclusive listing. If it doesn’t work out for you, then you can switch over to advertising on the MLS and releasing the listing to the public without having to suffer the consequences of buyer’s knowing that it’s been for sale (privately) for quite some time already.
4. If you’re in the process of renovations and need to restrict access – As mentioned in point 2, if you’re not quite ready to list but want to do some pre-marketing then exclusively listing your place might be for you. Whether you’re not able to show the home because you’re painting, or putting in new hardwood floor, when you list on the MLS to the public then the home absolutely must be available to show to prospective buyers at as open of a schedule as possible. By exclusively listing your home, you can still have the property for sale without daily visits from buyers.
What are the downsides of listing a home exclusively?
1. Your home won’t be exposed to the maximum number of potential buyers.With over 14,000 realtors in the Real Estate Board of Greater Vancouver, it’s impossible for one single listing agent to know all those realtors and all of their buyers. What’s more, is that without the listing being put online, all the buyers that are not working with a realtor yet have no way to know that the home is for sale. The highest price always comes from aggressive marketing and exposing the property to as many buyers as possible.
2. You won’t know the true market value of your home and could potentially get more money by listing on the MLS.
It’s hard to create a bidding war if you’re listing exclusively, and market value is a result of the greatest number of buyers being exposed to a home and deciding what it’s worth. By listing it on the MLS and exposing it to the online world, buyers can compare your home to other homes listed
3. Who comes out on top?
Double ending means that the same person represents the buyer and the seller, so a single agent takes the entire commission. In the case of the exclusive listing, the listing agent has a higher chance to “double end” because it’s quite likely he or she will bring their own buyers to purchase, thus making them more likely to be the biggest winner in this deal. Is the listing agent working more for the Seller, or the Buyer? Did the Seller get the highest price possible? Did the buyer pay more than they should have? Are there things about the neighbourhood or home that weren’t disclosed because the agent was so motivated to close the deal that they didn’t put the best interests of one of the parties in mind? Really… how can you represent the best interests of both parties when their goals are the exact opposite? The buyer wants the lowest price, and the seller wants the highest price. Trust me, double ending can get messy.
A couple questions you need to ask yourself before you list your home exclusively vs. the MLS….
– How do you want your home marketed?
– Are you OK with a limited number of buyers? Does who you sell to matter more than the price?
– Does your realtor have a large network of buyers and realtors?
If you’re wondering whether you should list your home exclusively or on the MLS then give us a call at 519-859-0133. We can walk you through what would be the best for you based on your needs, wants, and scenario. Wondering the value of your home? Reach out to us for a free market evaluation. Prefer text? 519-859-0133 Or email rahimcharania@gmail.com
Need to make sure your home sells quickly and for the most MONEY? We have you covered.