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.
Why 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).