What is Rochester’s Luxury Home Shadow Inventory?
April 10, 2023, Rochester, MI - There are high-end homeowners out there wanting to sell a home but prefer not to mass market it through the traditional methods employed by a realtor®️. Traditional methods include listing their address, photos, and details about their home into the MLS. This information then syndicates into sites like Zillow and Realtor.com. For various reasons described below, they are willing to forego the traditional strategy that typically provides the best results. The strategy: “The more eyeballs on your home, the more showings, thus a better chance of your home selling for the maximum price the market is willing to pay in the shortest amount of time.”
Often known as pocket listings or shadow inventory, which may or may not hit the open market one day, these homes are by nature exclusive. They are only known by a small buyer and agent pool. This can sometimes prove to be a good, or a not so good thing.
WHY BUY or SELL PRIVATELY?
There are many equally important reasons why home buyers and sellers may prefer to buy and/or sell privately, including:
• Maintaining privacy, particularly in the luxury home sector, is sometimes a consideration. Listing privately ensures that only pre-screened, qualified buyers can see the details about the home, including photos and the exact street address.
• Security for some is more important than buying or selling a home for reasons such as their known last name or profession. They may wish to sell but do not want the exposure involved in listing their home on the local MLS and flowing to Zillow.
• Exclusivity. Luxury buyers often use a realtor who has access to the shadow inventory.
• Certain sellers do not financially need to sell a house but wish to do so with little or no hassle and exposure.
• The seller has a trusted realtor®️ that knows how to reach their buyer pool, and who knows local luxury agents to help syndicate their home privately, giving them an opportunity to sell off-market.
Many times, the families purchasing these properties, in addition to a real estate agent, are using a representative, such as a Single Family Office executive, to preview the homes. These executives appreciate homes not available to the public to present to the family that employs them. Rochester and Oakland Township are often dubbed as places where the quietly wealthy live, as they do not carry the same “Oh, you must be wealthy” association that some other Detroit area suburbs get, which many ultra-affluent families appreciate.
WHY MOST PUBLICLY LIST THEIR LUXURY HOME
Below is why most people decide to publicly list their luxury home:
• For $1+ million homes in the Rochester school district, data tells us that today you need to get 12 qualified buyers through the door to get an acceptable offer. As 90% of buyers use a realtor, finding those 12 is much faster when you are putting your home directly in front of the people looking for homes. Realtors only search the MLS.
• Not all luxury home buyers use an experienced agent. They may be using their niece who just got licensed. Therefore, if it’s not in the MLS, the buyer would never learn about your home because she does not know about shadow inventory.
• It is an option to not permit Internet distribution from the MLS and/or not permit your address to display on Internet syndication sites. Therefore, some level of privacy is possible.
• If a seller does not grant a realtor the exclusive rights to publicly sell, many will simply say to call them when they are ready. This is because it can take thousands of dollars, hundreds of work hours, and a long time to properly privately market and sell a home. Instead, many realtors choose to spend their time and money focused on sellers willing to publicly list, because it will sell quicker.
• If you were selling an expensive item of any kind, would you want to limit your buyers to just 1 or 2, or would you want to reach out to as many as you could find to potentially bid? Many would want the most eyes and the greatest number of visits to find out how much the market is willing to pay.
• Some sellers choose not to put all their eggs in one basket and ask their favorite two realtors if they are willing to co-list.
You should ALWAYS ask your listing agent where your home falls on their priority list and be just as selective when choosing a buyer’s agent. As they say, knowledge is knowing a tomato is a fruit, wisdom is not putting it in fruit salad. If you are a buyer, feel free to call me at 312-545-8428 to visit or learn about Rochester and Oakland Township’s luxury home shadow inventory.
Article written by...
White Glove Realtor®
KW Paint Creek ~ Keller Williams Luxury
440 S. Main St. Rochester, MI 48307
April 10, 2023, Cara Mossington