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Private sales rising across all ends of the Vancouver real estate market

Kerry Gold, Globe & Mail, March 18, 2016

Real estate agent Juliana Jiao gave me a private viewing of a 3,700-square-foot luxury two-floor condo with a 20-foot-high living room ceiling and panoramic views of the north shore.

Ms. Jiao specializes in luxury condos in Coal Harbour, including what she calls “the most sought after” buildings, One Harbour Green, Two Harbour Green and the three-year-old Three Harbour Green. She says many of her listings are private, which means the homes won’t ever be seen on the multiple listing service. Instead, they will sell through a word-of-mouth network of buyers and other agents. Her clients value privacy so much that she hesitates to even disclose the asking price. It’s a case of, if you have to ask, you probably can’t afford it, she explains.

“It’s a very exclusive situation,” she says. “And on the MLS, everybody sees it.”

Ms. Jiao is offering a unique marketing approach for a niche client: the high-net-worth individual who prefers direct transactions with wealthy buyers. But private listings are on the rise at all ends of the market. An estimated 8,561 sales of all property types were sold privately in 2015, not counting the ones that were transferred to an estate, or were the result of foreclosure, or some other reason for a non-market sale. In 2014, about 7,154 were sold without listing, and in 2013, the number was at 6,984, according to Landcor Data Corp.

It’s not always the best approach, however, for the average seller who wants top dollar. Long-time west side agent Andrew Hasman says without listing, a seller is often leaving money on the table. He sold a house on a 24,000-square-foot lot on Hudson Street for $6.15-million. Prior to listing, the seller had been approached by a woman at their door who offered $5.5-million.

The Vancouver region housing market set a record this year for the highest number of February sales, and that demand is showing no sign of slowing. The demand for single detached houses is particularly high.

“You leave about 10 per cent on the table, on average,” Mr. Hasman says. “Yes, you save the commission, but do the math on $6-million. Without listing, how can we reach those buyers searching online to buy your house in Shanghai? We can’t. If they aren’t competing for your property, how do we know what you can truly get for it?

“There is so much money coming in, it’s unbelievable. I’ve got overseas clients who say, ‘Andrew, I have money to spend. If you could find me a 20,000- to 30,000-square-foot lot on the west side, let me know.’”

Condo marketer Bob Rennie says he got a “great front line experience of our detached housing market” when he called to inquire about a small east side house that he’d heard was for sale. Mr. Rennie doesn’t sell detached houses. He made the call on behalf of an interested family member, but the selling agent told him that the house had been sold privately.

“I said, ‘Could you tell me for how much?’ And he said, ‘No. It was a private transaction.’ It was a real surprise to me that it had been done secretly. Then he said, ‘How interested is your family member? The buyer might want to sell it.’

“That was a very unusual conversation. Was it under priced? Did the agent want to double end it – be the listing and selling person? That’s the evil side. On the other side of it is, [the seller] didn’t want to pay the MLS commission and they wanted it done very quietly.”

Mr. Hasman acknowledges the city is transforming too quickly, although he doesn’t know yet if it’s a good thing or a bad thing. But sellers need to be vigilant about selling, especially when the offer is made at their door.

“When you have an overheated market, you have the greed factor, the craziness comes out of the closets. You get all these ‘real estate experts’ and crazy amounts of cash coming from who knows where, chasing this market.”