In New York, They’re Called “Whisper Listings”

In the South Bay, they’re called “off market.”

(….and Lynne Lear is an Off Market Specialist!)

Here is what the New York Times has to say about it!


For Your Ears Only

In New York and other big cities,

homes are selling as ‘whisper listings,’

without ever being put on the market.

September 22, 2013

By Michelle Higgins

No open houses, no advertising and not a single online photo. And yet a $27 million town house on the Upper East Side and an $850,000 two-bedroom co-op in Lower Manhattan had no problem finding buyers in the past six months. Neither home was listed on the open market.

Off-market deals, known as whisper listings, have long been the purview of the ultra-high-end market. Certain properties, often with price tags of $20 million or more, are shopped with a shroud of mystery among a small circle of well-connected agents instead of being put on the market for the world to see.

Now this hush-hush approach has spread to many price points, including apartments below $1 million, as sellers realize the advantage they have, thanks to the lack of apartments available for sale in Manhattan.

“Sellers feel cocky. Sellers feel like they have the ball,” said Brian K. Lewis, an associate broker at Halstead Property who in the last six months has taken on seven whisper listings from clients who do not want to list their apartments, but are willing to entertain offers. These range from a two-bedroom for $1.295 million on the Upper West Side to a downtown loft for $12 million. “In an improving economy with no inventory, they have the asset people want.”

The number of apartments for sale in Manhattan at the end of August was at its lowest level in at least 13 years, according to Miller Samuel, the appraisal firm. The shortage has forced real estate agents to use aggressive tactics to drum up inventory, from trolling through expired listings in the hopes of reviving a dead deal to sending letters to owners in choice buildings to try to persuade them to sell.

No one knows how many properties are sold through a well-placed word, but off-market tactics appear to be on the rise in major markets where there is a scarcity of inventory, including San Francisco, Los Angeles and Miami.

“There’s more of it now than ever before,” said Shaun Osher, the chief executive of the brokerage firm CORE in New York, noting he has a database of about 50 apartments owned by people willing to sell given the right circumstances. “We as brokers know everything is always for sale at a price.”

Plenty of circumstances arise in which it makes sense to keep a listing out of the limelight, ranging from celebrities who don’t want to read about their property transactions in the tabloids to sellers who would rather not upset tenants prematurely. Some sellers hope to avoid the hassle involved in getting a property in shape to show. Others don’t want a lot of people traipsing through.

In March, for example, a five-bedroom town house at 12 East 76th Street on the Upper East Side sold for $27 million in a whisper sale without any wear and tear to the carpets. The place traded after just three viewings.

Yet most brokerage firms are of two minds about off-market deals. On the buy-side, they are largely for it. After all, quietly gaining access to an off-market listing means less competition in a market where open houses often provoke a stampede. Uncovering a whisper sale — by say, chatting up the doorman — for a client unable to find something on the open market ultimately benefits that buyer.

On the sell-side, brokerage firms tend to discourage whisper listings. For one, the secretive nature of whisper listings means some brokers will inevitably be shut out of a possible deal. Moreover, sellers hoping for a quick full-price sale through a whisper listing, they say, limit the buyer pool and thus, their chance of getting the highest possible price.

“The seller is always going to be best served by making sure the property is exposed to the widest possible marketplace,” said Frederick Peters, the president of Warburg Realty.

In addition, a whisper campaign can be a tall order. “It’s sort of like saying, achieve this great price and do all of this but don’t tell anybody about it,” said Hall F. Willkie, the president of Brown Harris Stevens.

Finally, if discretion doesn’t move the merchandise, brokers can end up doing a lot of work for nothing.

In a whisper campaign, the broker frequently has no signed contract with the seller, a scenario commonly referred to as a “pocket listing.” When there is a contract, it often mandates a quiet sale. If the broker finds a buyer, he or she often collects both sides of the commission.