Tell Me About ” Private Sales”
In every neighborhood & every price range, for various reasons and under a variety of conditions, Residential Properties are Sold Privately.
Exactly, what does that mean?
Usually when you speak of a Private Sale there will usually NEVER be:
1] a sign in front of the property
2] a listing in the local MLS
2] ads in the newspaper or online
Is a Realtor involved? Sometimes.
A property owner may hire a Realtor, create a formal Listing Agreement, with the condition that it be Sold privately. Then the Seller gets to define their concept of ‘Private”. Usually it includes the 3 points named above.
In that case, the Seller is relying on the Agent’s network of contacts to get the home sold. Usually it means that the house will sell for less than if the property was exposed to the whole marketplace.
In other cases, a Buyer may approach a homeowner directly and “take a shot” to see if the owner will Sell at the price the Buyer offers. That tends to occur mostly when a property has been listed for sale publicly in the past, and did not Sell. If they should come to an Agreement, a Realtor or a real estate attorney is usually brought in to handle the transaction.
Other scenarios often involve inheritance when their heirs know who wants the property and quietly arrange a sale.
Regardless of why they occur, because fewer people tend to know about the transaction and the details of the Sale, Private Sales typically do not affect market value as much as propertied that are Listed publicly.
However, since all Real Estate Sales are a matter of Public Record, and eventually the County Assessor published the details of the Sale, the information is always accessed by Appraisers when they are preparing formal reports.
So the Sold Prices of Private Sales may not influence a Buyer’s Opinion of Value, all of the Sold Prices in the neighborhood will factor into the Appraisal Report, and influence a Lender’s Opinion of Value.