In fact, there isn’t much time before the goons from organized real estate break down our door, shut down the computers and take us to real estate jail. It’s a normal jail cell, but what makes it real estate jail, is that it’s described as being located in an in-demand area, with 24 hour security, an on-site exercise area and low, low maintenance fees.
The reason we’re going to be in trouble is because we’re sharing a secret that the public isn’t supposed to know about. If you’ve ever felt like you’re missing out on something, that there must be some secret way in which some buyers and sellers transact, you’re right.
Here’s the secret – not all properties sell through the MLS system.
Sure, the multiple listing service (MLS) is where the majority of real estate transactions take place, but there’s other ways in which buyers and sellers get deals done. Without further ado, here’s three other sources for real estate listings.
No Realtors Allowed
The first alternative source for real estate deals is any approach that, by design or by accident, eliminates Realtors from the mix.
While the vast majority of real estate deals are negotiated and written up by Realtors, we don’t have to be involved in a real estate transaction. Lawyers as well as auctioneers can legally facilitate the purchase and sale of real estate.
Whether it is between family, long-time friends or neighbours, you can be on the look for real life opportunities to find a home that suits your needs and try to negotiate for its purchase. Such deals do take place but they are relatively rare, as it is often hard to find a motivated seller and buyer who are comfortable with such a large financial transaction without expert advice.
The more common version of an opportunity to buy a place with no Realtor involved is when the property goes up on a network designed to avoid Realtors.
There are lots of private sale listing sites within Ontario that are designed to share information, promote real estate for sale and allow buyers and sellers to meet without using a Realtor and, more importantly, pay Realtor commissions.
Whether these are designed specifically for real estate (fsbo.ca, prelist.org) or are more general sites that also include real estate sales (craigslist, kijiji), there are options that charge a nominal fee to list properties for sale.
The nominal fee is reflective of the fact that such sites are not commonly searched by prospective buyers. They may be difficult to navigate, have out of date listings, or most critically, just don’t have anything that fits the needs of a given buyer.
There is a subset of this type of option that also includes exposure on MLS. There isn’t an agent representing the seller in many cases, but they are actually on MLS and will show up when a buyer is looking on Realtor.ca. Examples of these types of “mere listings” or a-la-carte servicing would include purplebricks.ca, forsalebyowner.ca and countless others.
If you’re willing to put in the time and energy to search a number of different sites, you can find properties that aren’t on MLS. The caveat with such properties is that when they won’t pay a Realtor, you don’t get the services of your own Realtor as a buyer agent. This means you better be very certain that the price you’re paying is worth it, that you understand all relevant aspects of the deal and the property and that you know how to avoid problems in a transaction.
Only One Realtor Allowed
The second secret way in which some buyers find properties that aren’t on MLS is through the old-fashioned, hard work of their agent.
Whether it is door knocking neighbourhoods, calling particular buildings or advertising in focused communities, a pro-active approach can result in a buyer finding a property before the seller took it to market.
Such an approach can involve more costs for the buyer as the most common structure involves the seller paying no commission and the buyer instead taking on that cost. The clear benefit to the buyer is that the price, even including the commission the buyer agent’s brokerage, is one they are willing to pay to get the home in question.
In other cases, your agent can have listings of properties where the seller doesn’t want to go on the public MLS market and is open to their agent bringing a buyer without another agent. In such cases, the seller could potentially save on commissions and as such is willing to take a lower price on the sale of the property.
Only Good Realtors Allowed
The final secret source for real estate listings involves multiple Realtors, but not all of them. We’re talking about exclusive networks of busy, active real estate agents from reputable real estate brokerages.
With approximately 56,000 licensed real estate agents in the Toronto region, it’s hard to throw a rock without hitting a Realtor. On a positive note, if you hit a Realtor with a rock, they will calm down pretty quickly if you mention you might want to buy or sell a property.
While there may be lots of licensed real estate agents, there is a tremendous difference between an established, experienced agent who works at a full-service brokerage and the one who got licensed two months ago, joined the cheapest discount brokerage they could find, and have helped one person lease a condo.
When you work with an experienced agent from a reputable brokerage, you gain exposure to the network of your agent as well as the resources available to their brokerage.
Here’s an example of a CRM program we use on our team (Contactually) and what shows up when we look for contacts tagged as Realtors.
With over 1,200 Realtors that we’ve met, dealt and interacted with over the years, we have tons of people who contact us daily with new, exclusive listings. We do the same for our listings, because we want to make sure that the active, working agents out there are aware of what we’ve got available.
At the brokerage level, your Realtor also can benefit from their peers within their brokerage as well as the resources that the brokerage has available. Within Keller Williams Advantage, we have 130 licensed agents and at any given time, about two-thirds of those agents are regularly active and busy working with sellers and buyers. We share information about what our clients are looking for or what we have coming on private Facebook groups and internal meetings.
In the past couple of years, we have also seen the rise of extended, multi-brokerage exclusive networks through private companies like BrokerBay. BrokerBay is a brokerage software company that streamlines appointment bookings, showing feedback, offer registration and also offers a platform to share exclusive listings. We use it at Keller Williams Advantage and it ain’t cheap – and that’s a good thing. It’s used by about 40% of brokerages in Toronto and they are the full-service, quality focused brokerages that are doing enough business to make it worth their while.
Here’s a screenshot of their Exclusive Network platform where we can look for properties that aren’t on MLS but are currently available to peers within the BrokerBay network.
While not all exclusive listings are on this network (and if they were..it wouldn’t be exclusive would it?) we’ve reached a tipping point of sorts, where there are enough properties being shared that deals are getting done through this method.
There you have it – three ways that deals get done before they hit the MLS system and the general public. If you enjoyed learning about these alternative approaches to finding properties for sale and like the idea of working with an agent who can make the second two ways happen, get in touch with us. In the meantime, we’ll finagle a way to get ourselves out of real estate jail so we’re ready to help you move forward.
