Question: My in-laws are planning to sell their Bay Area home. My spouse grew up in this house, and the nearby schools she attended were the big draw.
We were visiting my in-laws, and selling the home was discussed. My in-laws interviewed realty agents from large firms. In my area, realty offices have five agents.
Realty offices can have over a thousand agents in the Bay Area. Here is the problem. The realty agents interviewed boasted about their intranet email sharing. It is an in-house digital marketplace where real estate agents share their wants and needs. The realty agents claimed their office colleagues have an overabundance of homebuyers for a home in their neighborhood with their schools. My in-laws are thrilled.
What the realty agents are proposing is an in-office home sale. That seems counterintuitive to market dynamics. I am a salesperson by trade. Granted, I have never sold a home. However, my experience informs me that total market exposure surpasses any private sale.
How can I persuade my in-laws and my wife to put their family home on the internet realty websites, hold open house dates, and sell traditionally? Do you have any ideas? It worked for my parents. It would work well with a house attached to good schools, too. Your thoughts?
Answer: Funny, you should ask. My video interview on off-market home sales and dual agency aired 10 years ago in over two dozen Silicon Valley cities. It was a series. The guests were Silicon Valley real estate attorneys Sam Chuck of Rossi, Hamerslough, Reischl, and Chuck and Robert Bailey, broker and founding partner of Bailey Properties in Santa Cruz, California.
In April 2014, see here now on YouTube Robert Bailey, then chairperson of the local Multiple Listing Service (MLS), commenting on off-MLS home sales.
“The net result of that analysis was that you’re seeing a growing differential in price between properties that are marketed off the MLS versus properties that are marketed and sold through the MLS. And three years ago, (2011), that was an average of $55,000 in difference between the median home price for property marketed off the MLS.
“Two years ago, (2012), that grew to about $95,000. Last year, (2013), that sat at $105,000. In the first quarter of this year, (2014), we’re seeing a differential of almost $113,000 between the median home price of a home sold on the MLS versus homes sold off the MLS. And so there is, there is a value to that network.”
It is dual agency if the same real estate firm represents the homebuyer and home seller. Full stop. In the same interview, real estate attorney Sam Chuck commented on in-house (dual agency) home sales.
“So, what does that mean to a seller down the road? If you’re a dual agent, what’s the seller going to say? In hindsight, at the time they tell you, I heard you, they tell you, Mr. Real Estate Agent, oh, believe me, I completely understand. But when the neighbor next door sells for a lesser home for a hundred grand more, all of a sudden, they don’t understand so well.
“And they’re going to think, Dual Agent, why did you do this to me? And guess what they’re going to say in response? What is that person’s attorney going to say first thing out of the box? You wanted both commissions.”
According to the California Association of Realtors, in March 2014 the median price of a detached single-family home in the San Francisco Bay Area was $667,860. In March 2024, it rose to $1,386,500.
You can help your in-laws calculate the “money left on the table” in 2024. Let your in-laws listen to the experts in the interview.
Inform your in-laws that dual-agency home sales are a source of disgruntled homebuyers and home sellers. Real estate attorneys love these cases. In post-sale, dual-agency disputes, it does not matter if these real estate attorneys represent homebuyers, home sellers or their agents — the facts are easy to discern.
For Housing Market Data in your area, visit my webpage for trends here. Do you have questions about home selling or buying? Full-service Realtor Pat Kapowich is a Certified Trust and Probate Specialist, Certified Real Estate Brokerage Manager, and career-long consumer protection advocate.
