One of the worst things a home seller can do when listing a home is price it too high.
Why? Because when a home sits on a Multiple Listing Service for months, and undergoes a few price cuts, prospective buyers will suspect there’s something wrong with it. And those who eventually are interested are more likely to fight for a lower price.
That’s why some sellers are asking their agents to market the home by word-of-mouth among colleagues and brokers, before the home ever is entered into a Multiple Listing Service, a database real-estate agents use to find homes for clients. At a time when home prices are on the rise, sellers are able to test the market with these “pre-MLS” or “pocket” listings, using prices that may be slightly higher than some comparable homes. These typically aren’t people who need to sell in a hurry; they’re often homeowners who are willing to wait to get the best price for their home.
“It’s a good way to tap into the market prior to going on the MLS,” said Hope Firsel, who with her husband, Chad, is putting a home in the North Center neighborhood of Chicago up for sale—but has not listed it officially just yet. It’s a custom-built, upscale home—complete with six bedrooms, a wood-burning fireplace and a decked-out home theater—and they want to make sure that their price is in line with the market before listing. “We don’t want to burn time on the MLS before we know what the honest feedback is,” she said.
It’s not only sellers who have something to gain from going this route, said Jennifer Ames, the Chicago-based Coldwell Banker broker who represents the Firsel family.