The “exclusive” (or non-MLS) listing has been more widely used in our sellers’ market conditions in Ottawa during the last couple of years. While not widespread, it has clearly picked up advocates during the 2020 pandemic. Though there is nothing inherently wrong with this type of listing, it certainly has its pros and cons.
Rarely used in balanced or buyers’ markets
The exclusive listing has been around for some time, of course, but is rarely deployed in balanced or buyers’ markets, for the simple reason that the best guarantee of achieving market value for a seller is to get the widest possible exposure through an MLS listing on realtor.ca.
“Coming soon” marketing
We have seen a proliferation of these kinds of advance, pre-announcement or “sneak peek” listings over the past couple of years in our market. Sellers and listing salespeople may have several reasons for wanting to get a property noticed prior to a full-blown realtor.ca launch. These might include:
- Allowing time to finish last minute tune-ups like painting, carpet cleaning, staging and shooting professional photos. In this instance, showings may or may not be allowed, but at least the property is exposed to the marketplace and buyers and their agents can keep an eye on it. In most cases, however, these types of listings are wide open and available for showings.
- Advance marketing through social media and other online methods can generate significant interest in a property and an increasing number are being sold without ever getting to a realtor.ca or MLS listing. Unfortunately, we lose the sales data for these types of sales and have no way of knowing how many properties are being sold in this “grey” market.
- Listing agents may generate additional buyer prospects for themselves to either “double end” the listing or to represent these new buyer prospects as a buyer representative on other properties.
- Some agents even market themselves as being the “off market” specialist who knows about hot new pending listings “before they hit the market” and thus try to differentiate themselves from the many others in their market.
Avoiding the MLS “gong show”
Even before COVID-19, some sellers were amenable to avoiding the hordes of buyers lined up to trample through their home, as listing scarcity elevated demand and buyer sense of urgency. Many sellers have been forced to vacate their homes during the initial listing period where offers are being held back to a certain date.
Those wishing to minimize the number of visitors or showings to get a property sold might consider an exclusive listing. Though one can never really be sure what a property might fetch on the open market, some are deploying a dual pricing strategy, with the exclusive listing priced at a higher or premium price while the realtor.ca price may be different to obtain the widest buyer interest and is priced lower to attract multiple offers.
The exclusive listing may provide a smaller number of buyer prospects, but if it generates an acceptable offer for the seller, it meets the objective. Buyers who gain early showings on an exclusive listing know they have a unique opportunity, being at “the head-of-the-line”. If the property suits them, they have to quickly make an offer decision, as there are many more buyers coming behind them. This sense of urgency, combined with an appropriate listing price, can yield a quick sale.
It also may be an easier scenario to manage for the listing agent and avoid the potential headaches associated with holding offers, managing showings, bully offers and offer-night management – in short, the inherent regulatory and board policy risks that are greater with an MLS listing in our many buyers-fewer sellers’ markets.
Is it really an “exclusive” listing these days?
Using the term “exclusive” historically meant that a specific listing agent was marketing the property, without co-operating with other MLS members, but today that distinction has largely disappeared. Most exclusive listings are marketed widely to the MLS community and available for showings. We have at least two Realtor Facebook groups in our market focused exactly on these types of listings. One of these focuses on all non-MLS listings and the other is for those that will never appear on MLS.
Risks to MLS
Sales via exclusive listings have grown during our sellers’ market but they are not yet at an alarming level, though here are some of the risks:
If too many listings get published and sold without the use of the MLS Realtor-to-Realtor network, the system loses important sales data but also some credibility. If too many MLS listings are pre-announced via an exclusive listing or listing agent marketing only, MLS listings may appear stale. It might also look to consumers that Realtors trading hot new listings without universal access via MLS is something akin to “insider” trading and detract from industry credibility.
Also if Realtor-to-Realtor marketing can be facilitated successfully by online non-MLS marketing, aren’t we just demonstrating that buyer-to-seller transactions could be equally successful and possibly without Realtor involvement?
It is harder for a buyer representative to stay on top of all available listings if those listings are proliferated across the vast universe of social marketing and online real estate sites. Realtor.ca and our MLS is the best central repository for listings and data capture and we should do everything possible to have all listings posted there. It is also much easier for consumers to search a single site.
The biggest argument against the use of the exclusive listing is that one just cannot be absolutely sure that the best possible market price has been obtained without the widest exposure possible. In a market that recorded some 57 per cent of unit sales above listing price (Ottawa Real Estate Board stats, July 2020) the realtor.ca listing still delivers maximum market value but the exclusive listing has carved out its own niche.