Private home sales, those not listed on the MLS, accounted for 23 percent of San Francisco County home sales in last year, according to findings from PocketList.
The firm expected to find a high percentage of these non-publicly listed trades in high end neighborhoods like Pacific Heights and Marina, but instead found these transactions were spread all over the county’s map like a “smallpox epidemic.”
“It’s happening and it’s prevalent,” said Tom MacLeod, founder and CEO of PocketList, adding a number of these deals involve newly constructed homes, as developers avoid listing on the MLS in order to maximize profits.
Agents avoid listing private sales results
Of the 23 percent of private sales PocketList also found that the majority were not entered into the MLS following closing. According to MacLeod, agents, as a courtesy, typically enter the sales prices of off-market deals on the MLS for comparable reasons.
“A portion of data is not available to get an accurate picture of the housing market in San Francisco,” MacLeod said, adding an asterisk should be put next to housing data because it doesn’t take into account all closed transactions.
The survey also found that the mean sales prices for private deals were 1.5 percent higher than mean MLS home prices.
PocketList is hoping to conduct similar private home sales surveys for the San Mateo and Palo Alto markets, as these cities are apparently where private trades are the most prevalent within the Bay Area.
App focused on private deals
In October of last year PocketList released a mobile app aimed at giving homebuyers access to non-publicly available homes for sale.
The majority of the Bay Area homes listed on the app are being “pre-marketed” with the intention of being listed on the MLS. However, the app is also an alternative channel for homes where the seller wants to completely avoid the MLS.
According to MacLeod, PocketList operates as a brokerage but doesn’t employ any agents. It obtains access to these off market listings via working partnerships with top agents in the communities the app serves.
Buyers are granted access to these privately-listed homes after downloading the free app and completing a verification process.
