The Unexpected Story of San Carlos Real Estate for 2012
While the two most prolific headlines in the San Carlos real estate market this year have centered on a dramatic market turnaround and record-low inventory, a third headline may steal the spotlight by the time this year is over. The number of off-market properties moving in San Carlos right now is truly astounding. This year, one-third of my transactions to date in San Carlos have been off-market. Each year many of the realtors who regularly do business in San Carlos will put together a deal here and there where the property never hits the market. However, what we have seen this year is the creation of a secondary marketplace that many are completely unaware of in their searches and sales. More importantly, this secondary market appears to be gaining strength. For anyone buying and selling in San Carlos in the foreseeable future, understanding this underground market is essential.
Where Did It Come From?
Over the past year, I have posted a few articles on the San Carlos Blog discussing off-market properties and the reasons behind those types of sales. The reasons given for the off-market properties in those articles were mostly centered around families who may not be in the best financial position, wanting to quietly sell their home. However, it is now undeniably clear that the off-market arena for home sales in San Carlos is growing far too fast and cannot be solely attributed to factors such as those facing financial hardship. In fact, in six out of my last seven listing appointments potential San Carlos sellers have asked about the possibility of selling their home off-market. So this is just not an idea floating around among realtors, rather it is perhaps the start of a totally different way of selling a home.
Why An Off-Market Sale For Sellers In A Hot Market?
That is the question at the center of any off-market sale right now. With pent-up buyer demand and prices rising, why would any seller not want to fully expose their property to the market and seek competition for their home? The answer seems to go something like this: Many sellers in this situation feel that they can still get a premium price, even in an off-market sale. If you run into a frustrated buyer, you may even command slightly more money in an off-market sale. Most sellers opting for this route understand that there is always the possibility that they slightly undersell the house, and they seem to be okay with that risk. In other words, whatever they are gaining by not having to put the house on the market is outweighing that risk.
What Is Gained By Sellers In Not Putting Their Home On The Open Market?
This really comes down to one thing……privacy. When this market really began to develop I made the mistake of attributing most of the sales to those facing financial difficulty and not wanting to broadcast that problem to the rest of San Carlos. What is becoming abundantly clear is that there are just as many families at the opposite end of that spectrum. Many do not want others knowing that they have had some success and prefer to keep major transactions, such as a house sale, away from the vast majority of the public. Let’s face it, with all of the technology and social media available right now, once your home goes on the market it does not take much effort to find out who the owners are and then find out everything about them online. Potential buyers and sellers now engage in this process more often than not. Conducting an off-market sale eliminates the majority of the privacy element and focuses privacy exposure to just one party, rather than many.
How Are Sellers Able to Locate The Right Buyer In An Off Market Sale?
Without online exposure, it is really 100% on your agent. One of the nice things about working in a town as small as San Carlos, is that you end up with a very good idea of which realtors have buyers looking in particular price ranges. Myself and other realtors get daily requests from other agents asking if we have anything coming up in particular price ranges. We simply log the request and if something comes up, we are able to possibly find a match. Additionally, the top 10% of all agents in our area are eligible for a program called Top Agent Network. TAN, as it is known, is an online forum which allows its members to move off market properties to known, top producing agents. I have found this forum to be invaluable with off-market sales.
As the segment of off market properties continues to grow in San Carlos, it is important to make sure that you do not completely rely on the published MLS. Doing so is leaving you without the other half of the story.