Some real estate brokerages promote their ability to sell homes privately— a practice commonly known as a private exclusive. It sounds intriguing – as if the listing of your home will be super special. But why are these brokerages bragging about a practice that does not serve sellers as well as a home sale on the open market?
Here are the facts about the real downsides of this type of listing:
A private exclusive listing can only be inwardly marketed within a real estate brokerage. It can’t be listed on the brokerage’s website or on other popular real estate sites; it can’t be advertised to the public or agents from other brokerages, and it can’t have a sale sign outside. The only way to market a private exclusive listing is to share it with agents within the one brokerage that has the listing; this relatively small number of agents can then share it with their clients. This is the opposite of a great, far-reaching marketing plan!
If you’re a celebrity, or you own a massive estate that very, very few buyers can afford, it might make sense to limit the people who can see your house. Even in this situation, a private exclusive is not a great approach. If you have concerns about privacy, your home should still be marketed widely. Then, showings can be controlled: they can be made by appointment only for buyers with a lender’s preapproval letter or other evidence that they are qualified to purchase the home.
Of course, the brokerage offering the private exclusive listing will benefit by selling the home within their own company and profiting off both the listing and the sale side of the commission. Agents who have profit-sharing arrangements with their brokerage will also benefit. Meanwhile, the homeowners lose—after all, it’s likely they could have sold for a higher price if more buyers knew about their home and competed to buy it.
It’s the law of supply and demand: the more people who know about your home, the more likely it will sell quicker and for more money.
If you’re thinking about selling your property, please feel free to contact me. Know that I will always put your interests first.