Central Ohio home buyers have been out in force in recent weeks, many of them motivated by rising interest rates and a sense of urgency. Columbus Business First reports that home inventory during January 2017 was 2.2% lower than the same period a year ago.
Despite this, home sales have been robust. January 2017 home sales volumes were 1.3% higher than January 2016. Overall, 4.4% more homes went under contract during January 2017 compared to January 2016. Home sales also enjoyed a brisk pace, with homes averaging 50 days on market, representing a 10-day decline from a year ago.
Of course, the real estate industry news omits home sales that occur outside of the Columbus Regional Multiple Listing Service; namely, homes For Sale by Owner (FSBO) and homes for sale directly by home builders. In essence, any home sale that doesn’t involve a typical listing agent isn’t counted!
This means that home inventory is always a bit larger than what statistics reveal. In our own recent review of FSBO and home builder offerings in Central Ohio, we found several hundred properties available outside of the MLS! These are homes that we can show you when you become a Buyer-Client of Buyer’s Resource Realty Services!
And because we only represent home buyers, FSBO-sellers and home builders are happy to talk to us. This means you receive the benefits of our fiduciary representation, with no conflict of interests, and no extra costs!
Another reason for lean home inventory is the growing practice of “pocket listings” by seller agencies. Sometimes these are private listings withheld from the MLS by request of the home seller, who wishes to maintain confidentiality. But more often than not, pocket listings are becoming a way for agents to double-dip commissions while providing virtually no marketing to the home seller.
It works like this. The agent gets a signed listing contract, and before it’s published to the MLS, the agent announces it to other agents in the same brokerage, who may have anxious, pressured buyers. This “coming soon” announcement or “broker preview” can result in offers coming in before the property is officially on the market!
This is great for the brokerage, because they get both sides of the sales commission without having to share any of it with an outside agency. And, they collect it without spending a dime on all the marketing they promised the seller! Imagine a 6% commission for two days word-of-mouth “work!”
This is a tremendous disservice to both home sellers and home buyers. Home sellers would enjoy more offers, and likely higher offers, if the home was publically marketed to a wider pool of buyers! Selling agents aren’t too concerned about this, because the fast turnover means less work for them, less expense, higher commission income, and look-how-fast-it-sold statistics.
Because there’s no official tracking of “pocket listings” it’s impossible to say just how rampant this practice is, or how much it may be affecting home inventory numbers, home sale prices and therefore appraisal values. Dual-agency brokerages who are benefiting by in-house sales and double-dip commissions have no incentive to provide transparency on the matter.
Taken from their own words, the National Association of Realtors® doesn’t define what constitutes a pocket listing, nor do they have an official policy regarding the practice. This is just another reason why Exclusive Buyer Brokers are needed to protect buyers’ best interests throughout the home search and home buying process!
As your Exclusive Buyer’s Broker, we serve your best interests at all times! Unlike real estate agents and brokerages who represent sellers, as an Exclusive Buyer’s Broker, we only represent you, the buyer, getting you the best price and terms with no conflict of interest at all times.
Understanding this distinction could literally save you thousands of dollars not only on the purchase price and terms, but also on seller concessions and home inspection issues, whether you are a first-time homebuyer or an experienced homeowner!
Contact us with your home buying questions! Remember, we are with you every step of the way…all the way home!
Broker, CEBA, CEBA-M, CNE, CSP, ABR-M, e-PRO, GREEN
Buyer’s Resource Realty Services
Serving Metro Columbus, Ohio with Exclusive Buyer’s Agents
7100 North High Street, Suite 204, Worthington, Ohio 43085
614-888-4110 | 888-888-4110 Toll Free | 614-839-4110 Fax