By Mark Pruner
As of the end of August, Greenwich has witnessed 433 property sales, yet 58 of these transactions remain more or less shrouded in secrecy. Surprisingly, 12 of these secretive sales can be unearthed online with some careful sleuthing by those in the know. For a Greenwich real estate agent, tracking down 375 of these 433 sales is a straightforward task, as they are neatly cataloged on the Greenwich Multiple Listing Service (MLS), and that number includes many of the private sales. So, why do these 13.4% of sales remain hidden, and why aren’t there more of them?
Let’s delve into these covert sales, ranging from the somewhat public to the most confidential. Firstly, among the 58 secretive sales, 12 were actually public listings, but most Greenwich agents missed them because they were never showed up on the Greenwich MLS. The primary reason that Greenwich listing don’t appear on the Greenwich MLS is that the listing agent is not a member of the Greenwich MLS. Staying active as a Greenwich MLS agent is an investment, and for those from out of town who rarely handle Greenwich properties, they may opt to exclusively list their properties on the statewide Smart MLS.
The Smart MLS is a statewide platform encompassing listings from every town and city in Connecticut, Greenwich included. Currently, there are 70 Greenwich listings on the Smart MLS. The majority of these listings are from Greenwich agents who are also members of the Greenwich MLS and have dual listings on both platforms. These 70 Greenwich house listings on Smart MLS are about half of the listings on the Greenwich MLS. Of the 134 listings on the Greenwich MLS 48% of the listings are exclusively on the Greenwich MLS.
Dual-listing on both the Greenwich MLS and the Smart MLS has its advantages and disadvantages. As you can see, the Greenwich real estate community is evenly split on the idea of dual-listing. Even within the same Greenwich brokerage firms, some agents choose to dual-list, while others do not. Personally, I prefer listing primarily on the Greenwich MLS, as dual-listings can complicate matters and do not necessarily expand your property’s exposure to more websites. Moreover, most Smart MLS agents are not members of the Greenwich MLS unless they routinely deal with Greenwich properties or have multiple listings here.
So, what about the 11 Greenwich listings that were solely on the Smart MLS and not on the Greenwich MLS. Interestingly, 9 out of these 11 listings fall below our median price of $2.5 million. In some cases, the listing agent has a familial or other close connection with the property owner, such as being college roommates. Additionally, we frequently see short sales and foreclosures, only on the SMLS. This is because national banks, which administer the mortgages, often lack awareness that counties in Connecticut have no legal existence. Unlike other states where county clerks manage land records, Connecticut entrusts this task to town clerks. Consequently, these large banks frequently hire a single agent in say Danbury or Fairfield to handle all of Fairfield County. This system often results in automated and less personal interactions with agents, who may not possess intimate knowledge of the property but are well-versed in the online bidding process.
In the first paragraph, we had mentioned 12 public listings not on the Greenwich MLS. The 12th listing was only on the Hudson Gateway Association of Realtors (HGAR). The listing a Connecticut listing on NY’s HGAR becomes more understandable when you consider that the CT/NY state line runs through the property, with the house’s side yard located in Rye Brook, NY.
So, what about the remaining 46 properties? These sales truly occurred off-market, never appearing on any MLS. The only way to discover these properties is to meticulously examine every deed at the Greenwich Town Clerk’s office, filtering out the sales reported on the Greenwich MLS. Alternatively, one can consult a few select, usually proprietary websites that categorize sales by MLS vs. private sales.
Among these off-market sales, the three most popular neighborhoods are Old Greenwich, Central Greenwich, and Cos Cob. Old Greenwich boasts 8 private sales and 54 reported sales. However, when we scrutinize the 54 sales reported on the GMLS, we find that 4 of them are tagged as “Reporting Purposes Only.” These are private sales voluntarily disclosed by agents and thus do not distort the market. Nevertheless, the number of unreported Cos Cob sales is more than twice the number of reported ones.
These private, unreported sales mean that 15% of the sales in Old Greenwich remain undisclosed unless you know where to look. Four of these sales surpass the median price of $2.5 million, while 4 fall below it. Consequently, they may not significantly impact the data. However, if you seek to gauge the market for homes around $4 million, knowledge of the two private sales is crucial, as there is only one publicly reported sale in Old Greenwich between $4 million and $4.5 million.
Economics also play a role in the decision between private and public listings. The majority of listing commissions in the GMLS are set at 5%, equating to $50,000 on a million-dollar sale. This $50,000 is often evenly divided between the listing broker and the buyer’s broker. Within each brokerage firm, the agent’s share of the commission is further divided between the brokerage and the agent(s).
Though the agents do not receive the full amount, it is still deducted from the seller’s proceeds. Consequently, the percentage of private sales under $1 million is the highest across all price ranges, as this 5% commission deduction has a significant impact on these sellers’ financial situations. Simultaneously, the demand for these properties in Greenwich is strong, with only 1.5 months of supply and no listings under $600,000.
At the higher price ranges, privacy becomes a paramount concern, with 11 private sales observed. Our highest off-market sale was for $13.5 million in Belle Haven.
In summary, private sales play a notable role in the Greenwich real estate market, though they constitute a relatively small portion of total sales. Due to data fragmentation across various sources, knowing where to look is crucial to gaining a comprehensive understanding of the market. Off-market sales can influence pricing decisions for individual homes.
The segment of the market with the highest percentage of off-market sales is properties under $1 million, driven by high demand and seller resistance to full commissions. However, private sellers may miss out on knowing how many offers they could have received or getting the highest possible price. Nonetheless, for some sellers, the allure of privacy and the avoidance of public marketing hassles outweigh the pursuit of the highest price.
In this market characterized by low inventory and strong demand, mastering the art of marketing and generating multiple offers is key.
Mark Pruner is a Realtor with Compass. He can be reached at 203-817-2871 or mark.pruner@compass.com
