Searching for a home is usually one of the first steps you’ll take as a home buyer. Here are some nuggets of wisdom you probably didn’t know about the home search process.
We’ve mentioned before how online search has taken over the search process, with the majority of home buyers finding their homes online. What you might not have known is how sites like Zillow, Redfin, and Realtor.com get their listings.
Behind the scenes, most listings are published to the MLS (Multiple Listing Service). Think of it as a huge database of properties that are being listed by agents all across the nation. This is where it gets complicated. There’s a different MLS for each market (usually broken down by cities), with over 600 different MLS databases.
To get access to the MLS, one needs to have a broker’s/agent’s license. This rules out home buyers directly getting access to that data.
That’s where Zillow, Redfin, Realtor.com, etc shine. They pull the listings from the MLS, and display it to you, for you to access that information directly. What this means for you, is that most of the listings on these sites do overlap. Differences you might see in the sites range from the way they display information, to how they prioritize which listings to show you (such as those with more or better images).
This means that there are listings on the market that haven’t been listed on the MLS. Some of these online search sites will let you know if you’re taking a look at such listings, usually by adding an ‘exclusive’ tag.
Since agents spend most of their time on the ground in neighborhoods, they naturally build strong relationships with buyers, sellers, and third parties (like lenders, title officers, inspectors, etc). This also means that agents can be the first ones to know about listings that aren’t on the MLS yet (or considered off-market listings).
We covered the changing role of an agent, and how their primary role is leaning away from providing information on available listings, but don’t be fooled to think that they won’t have cards up their sleeves – properties that they hear about before anyone else that might just be the perfect home for you!
For Sale By Owner (FSBO)
FSBO properties show up as real estate prices increase, and sellers feel that paying agents is not worth it to them. While this is still very niche and a rather negligible portion of the market (over 90% of transactions go through an agent), you might find your gem buried in FSBOs.
Remember how only agents and brokers can get access to the MLS, and not sellers or buyers without licenses? This means FSBO properties won’t show up on the MLS (and are considered off-market).
FSBO properties can show up directly on online search tools (if the seller pays directly to get their property listed), or even in places like Craigslist (real estate > housing > real estate – by owner). They can also just come up in conversation when chatting with friends and family, or in real estate networking events.
Again, these are the exceptions, not the rules, but keep your eyes open and you might get lucky in finding a property you hadn’t found anywhere else!
PS: Here’s a secret tip. Ask your agent if they know of any off-market FSBO deals. If they’re honest and well-networked, they should let you in on their secret inventory!