When Do You NOT Put Your House on the Open Market?

As I wrote about last May in Should I Take All that Cash, you will want to have a Realtor involved with selling your home. But, are there times that you might want to not have your house go out to MLS for all agents to show their clients? Here are the pros and cons of listing your house on the open market versus letting your realtor connect you with a buyer directly.

Econ 101 teaches us about supply and demand and right now there is way more demand than supply for homes. That’s why even with higher interest rates, home prices are holding steady or in some cases continuing to increase. For most sellers and most homes, that means that you will have the best chance for getting the most money for your home and the best terms (closing date, lack of repairs, temporary occupancy) when the most people get to have the option to buy your home. The only way to expose all these folks to your house is to have it listed on the MLS.

So, why would you ever NOT put your house on the open market? Recently I have had two clients choose not to so let me share their stories.

Complex Circumstances

Christy’s son playing on a tractor on their property

Christy recently underwent unthinkable misfortune. Her husband of only a few months tragically died leaving her with a mortgage she couldn’t afford, 10 acres she couldn’t take care of by herself, and a property that wasn’t even in her name. There was no will. Christy called me simply looking for another place to live, thinking that she would have to walk away from the equity in the property. Paul Lancaster of Farmhouse Law Firm walked me through the steps of how she could get ownership of the property and Christy immediately started that process. Even though her deceased husband had owned the home less than a year, as I looked at comps I realized that the value had gone up. I also saw that he had an FHA loan which is assumable (read my recent blog about assumable loans here). So, why did she choose not to put her property on the open market? Wouldn’t more buyers have driven the price up even more?

We actually planned to have the home hit the market. Christy and I were feeling the stress of so many unknowns. How long would the probate take for her to legally have the right to sell her property? What would the loan assumption process look like and would buyers and their agents understand it? With a loan assumption you don’t get to use one of the wonderful local lenders in our community. You are stuck with whatever entity is servicing the loan. As we started the process to allow someone to assume the loan it became very clear that it would take way longer and might be as frustrating as dealing with a telecommunications company or health insurance. When I mentioned to my massage therapist why my back was such a mess (tweaked it while helping Christy move things to have her house staged for photos), I had no idea that it would start the process of my massage therapist and her husband buying the property. I had known them for years and helped them buy their first home. Little did I know that they were craving more space for their kids to run and play and the 10 acres plus the assumable loan was very attractive. With Christy’s permission, I shared the information on her home and the complexity of her situation with my massage therapist and her husband. Christy was thrilled with the full price offer from them and the fact that I would be walking her through the whole process with everyone involved. Not having the house hit the open market assured Christy that I could help get her home to the closing table.

Need for Easy

Anyone who knows Kaitie knows that she likes change. With her impeccable eye for design and detail, each of the four homes she has sold in the last decade has easily appreciated in value. When she called this spring saying that she probably wanted to sell her home of less than two years, I wasn’t surprised. Some local job changes and the opportunity for her child to live near his best friend was the impetus this time. Kaitie is a pro at getting a house ready to sell but also knows the stress of having your house on the market. Keeping your house show ready even just for a long weekend with active boys takes work. She was also looking at paying capital gains on the profit (read more on capital gains here). She knew where she wanted to go and wanted to have temporary occupancy to make a move easier. Even though she knew that she would probably sell her home for more if it hit the open market, she asked if I could find someone that would want her home. Kaitie needed things to be easy with everything going on. Fortunately, clients had referred me to Jami, another recent widow who was wanting a change. When Jami and I talked about what she was looking for in a home, it was clear that Kaitie’s house was her dream home. Jami was flexible in her timeline and we were able to come to terms that made everyone happy. For Kaitie, knowing herself and the work of listing and showing a home was the reason she chose not to list her home on the open market. Selling your home is not just about making the most possible money just like buying a home is not just about making the best possible investment. Your home is an essential extension of your life. For you and your needs, there might be times to not have your home hit the open market. I’m always here ready to help you make that decision and walk you through the process.