MLS

Two Types of “Non-MLS” Listings

Not every “For Sale” home is on MLS.

That’s the case even if the home is being represented by a professional Realtor.

test waterWhy would a homeowner who truly wants to sell not want to reach the broadest possible range of prospective Buyers (on MLS), and instead quietly market their home?

In general, I think it’s fair to say that there are two kinds of non-MLS listings — at least that are in the self-interest of the Seller (vs. their Realtor; see, “‘Pocket Listings:  Good For Agents, Bad for Clients“).

Two (Legitimate) Kinds

One.  Early stage or “pre-listings.”

Such properties are typically getting ready to go on MLS, but aren’t quite there.

So, the homeowner may be clearing any city inspection issues (called “R&R’s,” for “repair or replace”); replacing carpeting or painting; or having their home staged.

In the mean time, their agent — smartly — is building market awareness, and screening for any especially motivated Buyers.

Thanks to private, for-Realtors-only exchanges such as Edina’s “Network One,” it’s never been easier to gain such pre-list exposure.

See, “Have a House/Need a House.”

Once and Future(?) Neighbors

Which leaves the second kind of non-MLS listing.

Call that, “testing the waters.”

In truth, there can be several motivations for a prospective Seller quietly shopping their home.

They may want to avoid disrupting the lives of their school-age kids — or their own — with multiple showings, strangers perusing their yard, etc.

If their home doesn’t fetch a certain amount non-MLS . . . they end up staying put (and their neighbors presumably are none the wiser).

To Renovate or Not? (That is the Question)

Scenario #2:  the prospective Seller may be wrestling with whether or not to tackle a major renovation.

So, assume that the home in question needs a $100k new Kitchen.

If the Seller lists the home on MLS at $700k and it doesn’t sell at or near that price, the owner can take it off the market, do the Kitchen, and put it back on at a higher price (presumably north of $800k).

Tripped Up by Listing History

The catch?

Prospective Buyers see the previous history (and market time), and psychologically can’t get past $700k.

That can be the case even if the listing agent takes pains to justify the now-higher asking price.

Conversely, if the same home doesn’t sell non-MLS at $700k, the Seller knows what they need to do.

Namely, renovate the Kitchen before formally debuting on MLS, this time “baggage-free” (i.e., with no accumulated market time or psychological resistance from Buyers).

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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