Sometimes a person who wants to sell their home but has not listed it in MLS asks me "Why should I list it in the MLS? I offer a comparable buyer agent commission to any agent that brings me a buyer."
The best way to answer that question is with a story. We list lots and lots of sellers who tried selling a home without the MLS, but were not successful. My favorite question to ask these people is "Before you listed with us, did any real estate agents show your home to buyers they were working with?" The answer is nearly always a resounding NO. Now realize that every one of these sellers had gotten calls from agents, but all these calls were agents who wanted to list the property. Some of these sellers ask me why no agents had called them to simply show the home to a buyer the agent was working with. Here is what I explain to them:
- Real estate agents rarely show homes that are not in the MLS because it is too difficult and risky:
- Agents don't know the non MLS home is for sale. This eliminates 99.5% of non MLS homes from even being considered.
- Agents assume non MLS homes don't offer a commission. This eliminates an agent's motivation to show the home. Agents know their commission isn't protected like an MLS listed property. This means it is risky to the agent's income to show a non MLS home.
- Agents fear that non MLS sellers who say they offer a commission won't follow through on that promise and the agent would lose the buyer agent commission for all the work they have done with their buyer.
- Agents may call non MLS sellers to try to get the seller to list with them.
- Agents don't look for non MLS homes for sale to show their buyers by driving neighborhoods, searching the internet, or reading newspaper classifieds. It simply is too much work for little or no possible reward for the agent.
- Agents know non MLS sellers are inundated with agents calling to list the property.
- Agents know it is difficult to schedule a showing because you have to get the seller on the phone.
- Agents know they will have to persuade the seller that they are not like the agents seeking the listing. These listing agents sometimes tell the seller they have a buyer as a way to get their foot in the door for a high pressure pitch to get the seller to list with them.
- Agents know to protect their commission Agents need the seller to sign an agreement and non MLS sellers are reluctant at best to sign any legal documents for an agent. This is a tremendous amount of work for the agent, to drop off paperwork, set up a meeting with a reluctant seller, pick up the paperwork, etc.
- Agents know and are frequently trained that non MLS sellers are often difficult, hate agents, and aren't really motivated to sell their home. All experienced agents have seen difficult personalities or unmotivated sellers derail transactions and cost the agent time and money in lost commissions.
- Agents know that after putting in all this work to arrange a special showing that the odds are low that their buyer will actually want to buy any one particular home.
None of these worries or difficulties exist with MLS listings, it makes more sense to just find a similar property in the MLS to show their buyers. It takes them 2 minutes or less to schedule a showing for a MLS listing. Time is money for agents, and they don't want to waste their time or money, or risk losing their buyer commission to a non MLS property. Imagine doing something in your own job that could jeopardize your take home pay for the hours you spent in the last two weeks. That is a scary scenario for anyone.
Smart agents don't invest hours of time just to arrange one property to show their buyer. It is simply too difficult and risky for an agent to show a non MLS home that is for sale.