Accidentally, I came across a very interesting article published by the Inman News: http://www.inman.com/2014/04/18/study-says-off-mls-deals-cost-home-sellers-big-bucks/.
Although this study was performed for the San Francisco real estate market, I think that we have quite a similar situation right here, in Winnipeg. Briefly, a study conducted by the agents Matt Fuller and Britton Jackson of Zephyr Real Estate says that off-MLS deals cost home sellers big bucks. They found that MLS-marketed single-family homes sell for 23 percent more. In 2013, the average single-family home seller in San Francisco who kept his or her property off the local multiple listing service left more than $200,000 on the table.
Fuller and Jackson performed their own analysis using data from the San Francisco Association of Realtors MLS and — through a tax reporting service — the San Francisco Assessor-Recorder’s Office.
“As Realtors in San Francisco we have a professional interest in making sure we are fulfilling our fiduciary duty to our clients. We’ve heard arguments both for and against off-MLS sales, but we hadn’t seen any data relevant to our clients and our market,” Jackson and Fuller said in the study report.
Their study found that 11 percent of overall home sales in the city and county of San Francisco last year were off-MLS. That share was 20 percent for high-end luxury properties above $3.5 million.
The study did not filter out for-sale-by-owner properties or non-arm’s-length transactions because there was no way to do so using the public records, Jackson told Inman News. The study also did not touch on how many off-MLS deals were double-ended since only MLSs keep track of specific agents and companies, she added.
Jackson and Fuller’s study focused on the sales prices of homes listed on or off the MLS. Broken down by property type and size, they found that properties marketed via the MLS almost always sold for more money. For example, MLS-marketed single-family homes sold for a median $911,500 in 2013, about 23 percent higher than the median for off-MLS single-family homes, $700,000. That’s a difference of $211,500 in this high-cost market.
For single-family, two-bedroom homes, there was no difference in the median sales price between homes marketed on or off MLS. But single-family three-bedroom homes marketed on the MLS had median sales prices that were 15 percent higher on average than such homes kept off the MLS.
MLS-marketed condos sold for a median $825,000 last year, about 9 percent more than properties sold off-MLS. The median sales price of MLS-marketed one-bedroom condos was 5 percent higher than those not listed in the MLS. That rises to about 8 percent higher for MLS-marketed two-bedroom condos.
Jackson and Fuller conclude that the most reliable way for sellers to get their money’s worth is to market their property on the MLS. For one thing, they say they can finally attach an approximate price tag to the decision to hold a property off the MLS and help their sellers weigh that cost along with motivations not to list via the MLS, such as privacy or convenience concerns.
“We believe it is our duty as Realtors to consult with our clients on strategies that will bring them the highest return on their investment. Based on the data we’ve seen to date, we believe that unless a seller specifically instructs us that the highest possible sales price isn’t their number one objective, the best way to ‘win’ for our sellers requires MLS marketing,” the report said.