Why Whisper?
Has the internet ushered in a golden age of transparency for real estate sales? Today, prospective buyers and sellers have access to a variety of websites providing the same information which was formerly the exclusive purview of real estate agents. I assumed that most consumers, as well as real estate practitioners, accepted that this greater access to information has been a good thing for everyone. So why is the pendulum moving, gradually but clearly, in the other direction? Welcome to the world of the “whisper” listing.
In many parts of the country, going off the MLS grid represents marketing decisions made at the corporate level. Agencies and agents are growing disenchanted with their MLS systems and trying to promote their listings in other ways. Consolidation has led some companies to feel that their brand and market share are big enough to obviate the need for shared marketing platforms like consumer-facing MLS websites; these companies believe they can drive consumers straight to them. Others withdraw because they fear that once their information escapes their control, third party listing aggregators like Trulia and Zillow will possess the means to insert themselves into transactions, essentially selling the buyer or the seller to the agent for a referral fee. But in New York’s higher price brackets, and in some of the country’s other ultra-luxury marketplaces, going off the grid with a listing is neither part of a corporate strategy nor a form of self-defense against aggregators. Here the primary reason for the whisper listing, a property which never appears in the MLS or on any website, but is whispered by the listing agent into the ear of the select few colleagues she deems appropriate is elitism.
This elitism can assume several forms. Sometimes the seller, concerned with privacy, doesn’t want any information about the listing to leak to colleagues, friends, or business associates (this of course all comes to nothing in the end, since all sales are a matter of public record and reporters are diligent about ferreting out those which are either very big or very noteworthy.) More often, in my experience, the agent likes the idea. It gives him complete control over the process and gives him a big, important secret, especially in a low inventory environment like that of today. Even if the idea comes from the seller, the agents holds the power to convince him or her to make the listing public. Whisper listings are NOT in the best interest of the seller. There is no question but that a fully promoted and web-enabled listing leads to the best outcome.
The marketplace always serves as the best arbiter of value. And no seller whose listing is “whispered” from one agent to a few others is guaranteed the full market exposure which determines the highest and best price a buyer might be willing to pay. What if the buyer likes to search the web on her own and has not employed the services of an agent? What if the buyer works with an agent to whom the listing isn’t “whispered”? Either one might be willing to pay a higher price for the property than other buyers; the seller will never know. The voice of the market is deadened by limiting the buyer pool. We often tell sellers, when discussing pricing, that the market will guide them. They will know the right price from the response their property elicits in the marketplace. But if the property never fully enters the marketplace, there can be no such certainty.
When I first entered the business many years ago, a small group of elite agents made virtually all the significant sales. Today, with over 10,000 residential agents claiming membership in the Real Estate Board of New York, it is simply impossible to know from where the buyer for your ultra-luxury property will arrive. He could e-mail you from Europe after seeing your listing on your website. She could arrive with an agent you don’t know, from a firm with which you have never done business before. But here’s one thing which is certain: the harder the listing is to find, the more likely it is that someone who might have paid top dollar won’t find it!