Question: Do homes sold on-market sell for more than homes sold off-market?
Answer: I want to start by saying that I know that this column comes off as being a shameless/salesy pitch for Realtors, but those of you who have followed my columns over the years hopefully recognize that I focus on informative, data-driven articles and steer clear of using this platform for sales pitches for myself or my industry.
With that said, I’m sharing this recent study of off-market vs on-market sales released by BRIGHT MLS (link to my column explaining what MLS/BRIGHT MLS is) because I think that they did a good job solving for the right answers in the data (not just favorable answers) using a massive sample size, filtering out the right data, and using a number of different cross-sections to confirm the findings within more specific datasets.
You can download and read the full study at the first link in the paragraph above (also linked here). The study included nearly 443,000 sales in 2019 and 2020 in the three BRIGHT MLS Metropolitan Statistical Areas (MSA) of greater Washington DC, Baltimore, and Philadelphia markets. The researchers compared about 116,000 off-market sales (using public records data) to about 327,000 comparable on-market sales.
What is On-Market vs Off-Market?
An on-market sale is a sale that is listed and marketed on the BRIGHT MLS platform, which provides mass syndication/distribution to the 95,000 real estate agents in the BRIGHT network (includes VA, MD, DC, PA, DE, and WV), brokerage websites, and most 3rd party consumer-facing sites (e.g. Zillow). An off-market sale is one that is not listed on the BRIGHT platform and either sold without any online marketing or only placed on a brokerage and/or 3rd party website for marketing. Off-market sales can take many forms, but are ultimately defined by the lack of market exposure via the BRIGHT platform.
Results Favor Selling On-Market
Across the entire dataset, homes that were sold on-market sold for 16.98% more, based on the median price of comparable sales. Here’s a screenshot from the study showing the cross-section of the Washington DC MSA (extends all the way into WV).
I’d like for this study to report on more cross-sections of the market and include larger and smaller homes, different price points, condo vs single-family, and more because I think it’s all really valuable data to help consumers make decisions about the sale of their home. There are certainly scenarios where sellers might benefit from an off-market sale or an off-market sale makes sense for reasons beyond a seller’s bottom line, but having as much data as possible to help people make educated decisions is key.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at Eli@EliResidential.com.