In the real estate world, exclusive listings are not a common topic. On the other hand, the focus is on the MLS (Multiple Listing Service). In this article, you’ll have a general idea about exclusive listings, what does it mean? What are its advantages and disadvantages, and why do many buyers prefer exclusive listings?
Even though listing a house on the MLS is the most common way to sell a home, one has to be aware of all the available options. Exclusive listings have many drawbacks that you need to understand before you list your house.
However, a good realtor is what makes the difference in the deal.
What’s an exclusive listing?
In real estate, exclusive listings refer to listings held privately with a realtor and are not posted on the Multiple Listing Service. Therefore, the real estate agent has to market and advertise the listing in his network of home buyers, builders, and investors to sell the house. That is to say; the exclusive listing won’t appear online on any public or private site. It results in an exclusive deal.
MLS: the opposite of an exclusive listing
Listing a house on The MLS is the most common way to sell a home. Most sellers do it. The MLS is a service available to all the realtors that are part of a board, and it shows on public sites such as Zolo.ca and Realtor.ca. Today, most people start looking for homes online, which is why the MLS is the most popular way to make sure that the largest possible number of buyers and real estate agents view your house. MLS listings usually mean that they are two realtors. One is representing the seller and the other representing the buyer.
Pros of exclusive listings
Many people prefer listing a home exclusively, and there are several reasons behind that. In the right market and circumstances, the positives of executive listings can outweigh the negatives.
- Privacy: Many people don’t want their relatives and friends to know that they are selling their house and why they are doing it. In situations like divorce, relocating, or death, sellers, prefer keeping it under the radar. Also, when it comes to celebrities selling their mansions, they usually like to do it exclusively. They don’t want people to know where they live and how much they are selling their house. Privacy, therefore, is the number one advantage to exclusive listings that MLS lacks. Not the whole world can see your house.
- Pre-marketing: Listing a house privately before you list it on the MLS is excellent pre-marketing. It works the same way “coming soon” works. It is possible that your agent finds a buyer before your listing becomes public. However, if he doesn’t, it’s still beneficial for you to hype it and let potential buyers know that the house will be available soon.
- Testing the market: Exclusive listings can be great to test out the market and list your house at a higher price than you anticipate. When property prices get reduced, realtors can see that information. They also can know the price it was bought for in the past, and the previous price it was listed for. If exclusive listings don’t get you a good deal, you can start marketing your house on the MLS, where the public can see it without knowing that it’s been listed exclusively for a long period.
- Restricted access to the house in the middle of renovations: If your house is not ready yet to be on the MLS, exclusive listings can work as a great pre-marketing. Whether you’re in the process of painting or installing new appliances in the kitchen, restricted access can buy you some time. When a house is on the MLS, it’s open to the public, and it needs to be ready to be accessed by potential buyers according to a schedule. Your house can still be open for sale with an exclusive listing even if it’s not visited daily.
Cons of Exclusive Listings
- Your house won’t be seen by a large number of buyers. It is not possible for a listing agent to have connections with every realtor in town. If the listing is not posted for the public, buyers who are not working with an agent won’t be able to see your house. Selling a house for the highest possible price happens through public exposure and access to the highest number of buyers.
- You can’t know the true market value of your house. Listing your house on the MLS is the only way to get the buyer who is willing to pay the most for your home. By listing a property exclusively, it’s difficult to create a bidding war. Also, Knowing the actual market value of property happens by exposing it to the largest number of buyers. On the MLS, home buyers will be able to compare your house to others listed at the same time.
- Who comes out on top? In exclusive listings, there will probably be a double ending where the same agent represents both the seller and the buyer and takes a full commission. In such cases, the agent will probably bring his own buyers and has a high chance of double ending and being the biggest winner. However, if the agent is double ending, will he be working more for the buyer or the seller? Does the seller actually get the highest price possible? Does the buyer get the fairest deal? Does the agent disclose everything about the neighborhood or try to close the deal as soon as possible? Is it even possible to consider both parties’ best interests? Working for both the seller and the buyer can’t be chaotic.
Before deciding to list your house exclusively or on the MLS, you need to ask yourself a few questions.
- Will you be okay with a small number of buyers?
- Is selling at the highest price your number one priority?
- Who is your realtor? Does he have access to a large network of realtors?