Question: Are there any studies or data comparing the results of on-market vs off-market sales?
Answer: I hope everybody had a great Labor Day Weekend! Last week, we reviewed what the MLS/Bright MLS is which is a good lead into the recent study completed by Bright MLS that looks at the performance of properties sold on-market (via Bright MLS) vs off-market (not listed for sale in the MLS). For those so inclined, the study provides a detailed explanation of the methodology that led to the data reported in this article.
Selling On-Market = Listing in MLS
When people talk about selling or buying homes on or off the market, they are generally referring to whether or not that home was listed in an MLS. Our regional MLS is called Bright MLS and is the second largest in the country including most or all of VA, DC, MD, DE, WV, PA, and NJ
Almost 95% of DC Metro Homes Sold on the Market
The vast majority of homes are sold on-market, especially in the DC Metro, which has the largest percentage of on-market sales of anywhere in the Bright footprint with 90% of homes selling on-market in 2022 and 93.5% in 2023 Q1, up from 85% in 2019.
Selling On-Market = Much Better Price for Sellers
The study went to great lengths to analyze the results of comparable properties (something they failed to do in their initial study in 2021) to provide an accurate measure of the difference selling through Bright MLS makes for sellers. The chart below shows how much more a comparable home sells for when sold via Bright MLS vs off-market/MLS.
The on-market premium has increased significantly over the last three years when the market has been running red-hot. Homeowners in the DC Metro earned 18% more on comparable homes sold on the market in 2023 Q1 and 15% more in 2022.
When the market heats up like it has the last few years, you often hear homeowners talk about how easy it is to sell a home off-market because there’s so much demand. Sure that is true, but the question is not whether or not you can sell the home off-market (of course you can), the question is whether or not that nets you the best result (it rarely does).
Why Sell Off-Market?
There are several scenarios where off-market sales with limited exposure are justified – privacy (athletes/celebrities), security (high-value personal possessions), interest from a family member, friend, or neighbor – and there are examples of off-market sales producing results that match or sometimes exceed what one might get via the MLS, but for the vast majority of homeowners, an on-market sale will produce significantly better results because of the tremendous increase in exposure to potential buyers.
Those considering an off-market sale should do so with a clear understanding of the disadvantages and measure those against their reasons for considering an off-market approach.
If you’d like to discuss buying, selling, investing, or renting, don’t hesitate to reach out to me at [email protected].
If you’d like a question answered in my weekly column or to discuss buying, selling, renting, or investing, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at EliResidential.com. Call me directly at (703) 539-2529.
Video summaries of some articles can be found on YouTube on the Eli Residential channel.
Eli Tucker is a licensed Realtor in Virginia, Washington DC, and Maryland with RLAH Real Estate, 4040 N Fairfax Dr #10C Arlington VA 22203. (703) 390-9460.
