By Mark Pruner
Greenwich real estate can be a very secretive place when it comes to real estate deals. As of the end of September we have had 383 sales on the Greenwich Multiple Listing Service, but this is not all the sales in Greenwich. We have had 83 sales that are off-market and another 16 sales that were off market, but were subsequently voluntarily reported on the MLS by the listing agent.
Private sales happen for a variety of reasons, but two principal reasons are privacy at the high-end and a very hot market at the lower end. At the low end, the market is so hot, that it can be reasonably easy to find a buyer with an off-market sale. Often, you don’t have to talk to many agents, before you find one with a prospective buyer, even if you just hint that you might have something coming on.
We had private sales this year at $4.2, 5.5 and 8.7 million. For the two lower sales prices, the first buyers to see the house actually paid over our list price, because they really, really did not want the listing to go public. All of our listings under $4 million were listed on the GMLS as were our two listings over $8.7 million. Each situation is different.
Now, you might think that many of those 16 private sales below $1 million most didn’t use a real estate agent, but that’s not the case. Right now, Zillow, which has by far the highest percentage of searches for Greenwich properties, only has one FSBO (For Sale By Owner) listed out of 226 Greenwich listings of all types. The one FSBO that we do have is on for $650,000. For sale by owners happens very rarely in Greenwich, even under $1 million.
Once you get over $1 million, most sellers list their house on the GMLS, or occasionally on the SmartMLS, if they have an out of town agent or if it is bank-owned property. Banks, particularly national banks, tend to have one agent for all of Fairfield County, which is how they operate in the large majority of states that have county government.
In Fairfield County, the bank’s real estate agent often isn’t a member of the Greenwich MLS, so it doesn’t show up on our MLS. As a result, they end up listing the property on the statewide SmartMLS and do little else in the way of selling the property, because the bank is only paying a small commission.
These banks with Greenwich properties do themselves a major disservice, by focusing on getting the lowest commission that they can on the front-end and losing hundreds of thousands of dollars on the back-end over what they would have gotten with more extensive advertising and marketing.
At the high-end, over $5 million, privacy is a major factor. It is getting harder and harder to maintain privacy in this world of online databases and Google searches, but private sales of real estate are still hard to find. (My broker has a proprietary database, which is where this information comes from.) Above $5 million 23.3% of all sales are private, compared to 17.8% for the overall market.
Our private sales are spread throughout the town, but as you might expect, the lower end sales are concentrated in Byram and Pemberwick, the older houses east and west of central Greenwich and in the smaller zones north of the Post Road in Old Greenwich and Riverside. The higher end private sales are concentrated in the two and four-acre zones in northern Greenwich and along the waterfront.
When you look townwide by neighborhood, Central Greenwich and Cos Cob have the most private sales, followed by Mid-country, Old Greenwich, Riverside and North of the Parkway. We also see a fair number of sales in our high-end private associations such as Belle Haven, Mead Point and Millbrook.
So should you list your Greenwich house privately or go directly to the Greenwich MLS. Of the sales in Greenwich over 80% went with the Greenwich MLS, but what about the other 19%. Economics plays a role in the decision between private and public listings. Some property owners don’t want to pay a commission and keep all the sales proceeds for themselves, other than the state and town conveyance taxes and their attorneys’ fees.
These FSBOs are seeing very good demand and very limited supply, however, we are not seeing a big shift to FSBO sales as our sellers are smarter than that and often very busy. The studies show that owners get the highest net price by getting maximum exposure and multiple offers, which is what public listings do.
The sales process nationally and in Connecticut is very complex and even more so this year with some major law changes and a legal settlement trying to push buyers to pay commissions. I spent 14 years as a real estate attorney and another dozen year running my own interactive marketing company. My brother, Russ, ran a very successful brokerage firm for decades, yet every day, we discuss among out team what is the best way to handle a marketing, legal, regulatory, negotiation or difficult personality issue.
The other decision is how much you value your privacy. It is a big motivation for many homeowners. The higher the price, the more the motivation to keep sales and purchases private. These private sales are done with brokers on both side they just aren’t listed for sale on any MLS. On the flipside, what the seller can never know in a private sales is if did they get the highest possible price. Was there someone out there that would have paid more.
For some buyers, the highest possible price is not the goal. Getting the last few percent in a sale takes a lot of work and a lot of exposure of your home to your family, the neighbors and all your friends. For that last few percent, you need your house in perfect shape. I’ve worked with clients to have their whole house painted and floors refinished, to have large trees removed to open up the property. Houses have been completely staged with all of their furniture put in storage and new furniture brought in. Seller then have to keep this house perfect, perfect for all the subsequent showings.
Many sellers are willing to give up the highest price possible if they can reduce the hassle, time and expense. Many of our senior clients have a lot of appreciation in their house and are physically and financially incapable of doing the work to get the house in tip-top shape. A well-priced private sale can be quick and can save a lot of hassle and still give them all the cash that they need.
It’s up to the owner what they want to do, but make sure you are fully informed on each option.
Mark Pruner is a Realtor with Compass. He can be reached at 203-817-2871 or mark.pruner@compass.com
