I have a secret. And, secrets are meant to be protected. This is the exact reason why whisper listings, also known as pocket listings, are the most coveted of all real estate secrets.
The real estate industry has been under the National Association of Realtors Clear Cooperation Policy act for over a year. The act enacted a ban on agents who decline to post listings on MLS, brought upon as the real estate industry adjusted to the new normal caused by the pandemic.
As with secrets, when shared, whisper listings are kept exclusive to your network.
The NAR Clear Cooperation Policy was meant to protect agents who might not have the same circle as others, giving every single Realtor, and client, a fair chance at a property.
The market is as fierce as ever in markets such as Atlanta, Phoenix, and Dallas, making whisper listings a popular topic in the industry. With 40% fewer homes on the market than this time last year, pushing whisper listings seems to make sense for a variety of reasons.
4 reasons clients go with a whisper listing
There are four key reasons why clients choose to go with a whisper listing:
- Sellers don’t NEED to sell.
- In a market as strong as it is now, the only thing that makes your house stand out is that it isn’t available.
- Sellers are private people.
- Sellers want to sell at a selling point that isn’t realistic.
It’s all about exclusivity
People want what others can’t have, which is why they’re willing to pay more than a home is worth. This is the exact reason why pocket listings sell for over retail because buyers are getting access to something that others can’t have.
I’ve leveraged whisper listings significantly in my career, all while staying within the confines of NAR’s policy. From a seller’s standpoint, you can maximize the sales price, from a buyer’s standpoint, you can guarantee the home process. The market is so competitive right now that people are putting in blind offers on homes, hoping they are like the photos.
This is causing a loophole with the NAR Clear Cooperation Policy. Even though you can’t schedule a tour of an incoming property, you can accept a contract. Risky? Yes. Though it’s worth the gamble for clients eager to find a home in this market.
The process of handling a whisper listing
Handling a whisper listing, whether from the buyer or seller perspective, requires high-level thinking, as they tend to be more complicated than your traditional sale. I recently closed on a whisper listing for a $7 million home where I represented the sellers. The particular buyer was relocating to Dallas and needed to find the perfect home amid a competitive market. In this particular case, a whisper listing made the most sense.
While there has been a massive decrease in whisper listings over the past year, as Realtors are realizing they aren’t invincible, they still seem to remain the ultimate golden ticket.
Following the rules
The whisper listing ordinance is shaking things up in the industry, but there are ways to get around it. While whisper listings aren’t allowed, there are ways to legally have an under-the-radar listing, such as promoting it internally.
I follow the rules, so I won’t try to break the regulations, but there are ways to internally promote an off-the-market listing, legally. Within my brokerage, it’s common to promote a listing within our private Facebook group. It should be worth noting that the competition is so tight right now that Realtors within my brokerage are still competing with each other for these off-the-market listings.
I believe we are looking at another decade of a market similar to what we are experiencing in 2021, which means whisper listings will continue to be a common discussion throughout the industry. Whisper listings have already caused tension within the appraisal industry, and I believe they will continue to wreak havoc as the market adjusts to its new normal over the next decade.
Rogers Healy is the Founder and CEO Rogers Healy and Associates Real Estate, ranked as one of the “Nation’s Best” by the 2021 RealTrends 500. He is also the Founder and CEO of Healy Global Relocation and Healy Property Management.