Find Off Market Homes in Silicon Valley with Compass Make Me Sell

Navigating Silicon Valley’s competitive real estate market can be challenging, especially if you want a home in good condition, with a decent floor plan and a reasonable lot size in a desirable area…for a price that doesn’t break the budget. Finding such properties by looking on the MLS (or Zillow, Redfin, etc.) can be hard enough – and then when you do find a home you love, because you found it on the MLS, everyone else also knows about it too. And that means you’re quite likely to find yourself party to a nasty bidding war. After all, if you love it, it’s a good bet that everyone else will love it too.

Since securing a good home on the open market can be such a challenge in Silicon Valley, many buyers are interested in finding off-market properties that not everyone knows about. These hidden treasures, not publicly listed on the Multiple Listing Service (MLS), have traditionally been very hard to find. Scouting them out can be like hunting for a unicorn, or at least, finding that needle in a haystack. Fortunately, time marches on, and at last there is a viable solution to finding these off-market and un-listed properties. Today, Silicon Valley homebuyers can leverage the Compass Make Me Sell (MMS) program. Through this program, I can connect you to unlisted properties through my extensive network within the Compass agent community.

Understanding Off-Market Properties

But before we get too far, I think we should begin by defining what exactly is an off-market property, before we talk about Compass Make Me Sell (MMS) itself. That’s because MMS is essentially a system for putting together off-market sales by connecting buyer with seller through the Compass agent network. The most basic definition of it is any home that is not publicly listed for sale on the open market. In North America, it’s fair to say that the “open market” is the Multiple Listing Service, where any buyer anywhere in the world can see homes listed for sale – their prices, locations, pictures, video, property characteristics, etc.

By that definition, almost every single property in the United States would be considered an “off-market” property. At any one time, there are usually between 1 and 3 million homes listed for sale on the MLS in the United States – yet there is a total of about 130 million 1-4 unit residential properties all told. Clearly, almost every property is therefore off-market at any one moment in time.

It’s safe to assume that the properties listed for sale on the MLS are actively looking for a buyer. But there are many more which might be considered to be “passively” looking for a buyer: “For Sale by Owner” homes, homes that were for sale but didn’t sell for some reason (usually because they were overpriced), although the seller would be happy to entertain offers…and many more where the owners would sell, for the right amount of money. After all, you know what they say: everything has a price.

With that understanding, you could consider that there’s almost a limitless supply of homes that could be for sale, but you don’t know about them, because they are not listed for sale on the open market. What you’re seeing on the MLS is literally just the tip of the iceberg.

Off-Market Properties vs. Pocket Listings

There is some confusion about the difference between “off-market properties” and “pocket listings.” While all “pocket listings” are off-market properties, very few off-market properties are actually pocket listings. A “pocket listing” is a home where the seller has actually signed a listing agreement with a real estate brokerage, allowing the brokerage to market the property at a specific price, and agreeing to pay the brokerage a certain amount of money if the property sells during the time the listing agreement is in effect. In the case of a pocket listing, there will be language in the agreement that specifies the home is not to be marketed on the MLS.

Sellers may choose this route for various reasons, including privacy concerns, a desire to test the market discreetly, or to target a specific group of buyers (such as the ultra-wealthy).

However, it is common practice in Silicon Valley (and most of northern California, and the rest of the United States for that matter) for a homeowner to sign a listing agreement with a brokerage weeks or even months before they intend to put the property on the market. The reasons for this vary, but it is very common for a homeowner to work with a REALTOR® for an extended duration while they prepare the property for sale. The REALTOR® will not want to invest the time, energy, and often money into helping a homeowner prepare their home for market without having a contract which says the REALTOR® will get paid when the house sells.

When a homeowner signs a listing agreement with a REALTOR®, that REALTOR® must list that home for sale on the MLS within 1 business day of signing that agreement with the homeowner. This is required by the Clear Cooperation Policy (CCP) promulgated by the National Association of REALTOR®s (NAR) and the various MLS systems. If the homeowner and seller want to keep the home off the MLS for longer than 1 business day, they need to sign an addendum to the listing agreement saying that the listing is to be kept off the MLS, and explaining to the homeowner the limits that this places on the broker in terms of marketing the property.

Any such listing agreement which is signed by broker and owner that dictates that the home be excluded (for a time, or for the entire duration of the listing agreement) from the MLS creates a pocket listing. The Clear Cooperation Policy requires that the Broker cannot market the property outside of their own brokerage. The listing agent is free to circulate and promote the listing within their own brokerage, and to that agent’s clients, and any client of other agents of the brokerage. However, under CCP, the agent cannot put a “for sale” sign in the yard, cannot advertise the property on social media, any magazine, newspaper, direct mail piece, and cannot tell any other agent outside of that brokerage about the listing.

However, Silicon Valley homeowners who work with Compass have the option to market these “pocket listings” as a Compass Private Exclusive (the first phase of the Compass Three Phased Marketing Strategy). When a Compass “pocket listing” is made available as a Compass Private Exclusive, all Compass agents, from coast to coast, can see the listing and share it with their clients. Their clients who have a search set up on the Compass platform as a Compass Collection can also see these Private Exclusive listings – automatically, co-mingled with regular “on market” listings.

Compass Private Exclusive listings are considered off-market properties…even though the property can be seen by the thousands of buyers who are working through the Compass platform to find their home. But make no mistake: even though Compass is the largest brokerage in Silicon Valley and the Bay Area (at least by sales dollar volume), this is still just a small fraction of the total potential buyer pool in Silicon Valley. It is, however, a much better way to market a property than any other brokerage’s “pocket listing” strategy available under the rules of NAR’s Clear Cooperation Policy..

All Other Off-Market Properties

So in practice, most “pocket listings” are listings that will eventually come onto the MLS, unless they sell first. Compass says that 94% of its listings do sell on the MLS, so obviously only a small fraction sell off-market.

All the rest of the properties in the United States – homes for which no listing agreement whatsoever has been signed – make up the rest of the “off market” properties. In most years, this constitutes over 98% of all homes in the United States.

But that doesn’t mean you can’t buy these homes, or at least make an offer. Because remember: everything has a price.

The Compass Make Me Sell Program

The Compass Make Me Sell (MMS) program was created for homeowners who have at least half-way raised their hand and said, ‘Yeah, I’ve got a price.” It could be that the price is what we’d call aspirational. That’s one way of saying it: another might be crazy high. A price that nobody would pay…probably. But perhaps someone would pay something close to it?

A good negotiator will tell you to never make the first offer. Yet when you list a home for sale, you are in fact making the first offer with the list price. Many “make me sell” sellers are setting a high price as a negotiating tactic – setting a high anchor from which they will begin negotiating. But they’re not so much making you an offer to sell their home for the “make me sell” price. Rather, they’re saying that they might sell their home for the right price – and maybe it’s something like the “make me sell” price, or with the right terms and timing, it could be a number lower (or even higher) than that.

Personally, I don’t believe that the “make me sell” price is a number that should be paid too much attention to – so long as it is a number that’s greater than zero. Because any non-zero number indicates that there is at least some willingness to entertain an offer on the property – and therein lies a greater opportunity to effect an off-market sale.

I frequently talk to homeowners who tell me, “If you can get me $X, I’m a seller.” Almost always, $X is some fantastically high price above what I’d think is fair market value. As a Compass agent, I can input these “make me sell” prices into our private database, visible only to Compass agents. But I’m not the only Compass agent who can do this: all Compass agents can do it. There are over 32,000 Compass agents doing so, resulting in thousands of “make me sell” opportunities across the country and around the greater Bay Area.

Again, these homes are not listed for sale. They are not pocket listings; no agreement is signed. These are opportunities for a Compass agent, or agents, to bring a buyer and seller together to create a conversation, and then a negotiation, that may effect a mutually beneficial transaction that ends in the transfer of the property from one party to the other.

There are thousands of homes that have a “make me sell” price set on the Compass platform. But what about all the rest of the homes? That still means that there’s still about 98% of homes in the United States (or Silicon Valley) where nobody has so much as half-way raised their hand about selling…but again, everyone has their price. How can you approach homeowners that have properties like you’d want to buy, when they haven’t indicated they’re looking to sell?

Compass Make Me Sell is Priceless

While it is possible for a Compass agent to ask a seller to name their price, and add that into the Compass platform as their (totally non-binding) make me sell price…most homeowners will not have talked to a Compass agent about this. Yet, most Compass agents know dozens, hundreds, or possibly even thousands of homeowners, with their names, phone numbers, email addresses, and property addresses securely stored in the Compass platform. Every address that a Compass agent adds into their Compass database is verified and matched to a physical property address. The Compass platform will then use public data records to know the property characteristics such as longitude and lattitude, square footage, lot size, bed and bath count, age, and all the rest – which then become searchable inside the Compass platform.

This is huge. Before Compass MMS, let’s say I had a buyer looking for a three bedroom, two bathroom, 1,500-2,000 square foot home on a 5,000-10,000 square foot lot in the Cambrian neighborhood of San Jose. I would only find, at most, a few dozen properties on the market.

But now as a Compass agent, I can search for both on-market properties that meet the buyer’s criteria, and potentially thousands of off-market properties too which are connected to one or more Compass agents. Of course, not every property in the United States or the greater Bay Area is connected somehow to a Compass agent. But as of the time of this writing, out of 450,000 total 1-4 unit residential properties (single-family homes, condos/townhouses, and multi-family homes) in the city of San Jose, there are currently 103,000 that are connected in some way to one or more Compass agents. That’s roughly 22.8% of all homes in San Jose whose owners you could be connected to through the Compass agent network and Make Me Sell.

Some of these homeowners will be in my personal database, and I can myself reach out to these owners directly, as I know who they are, I know their property address, and I will almost always have at least their phone number or email address (and often both).

But the vast majority of these homes will be connected to another Compass agent. I can communicate with these agents through email, text message, or I can just pick up the phone and call them and ask if they happen to know if so-and-so would be interested in selling such-and-such a property. Obviously, the odds are slim that any one individual owner would be open to selling in a “soon-ish” timeframe, for a price that a buyer is willing to pay, and that their home will be one that the buyer likes enough to actually want to purchase.

But when you do this at scale…at the scale of the Compass network, with thousands of agents and tens of thousands of homes…what is near impossible for just about any non-Compass agent becomes a very distinct possibility. Even with these tools, and with the advantage of the huge Compass network, it will usually require a considerable amount of work to find an off-market deal for a buyer. And that’s why when you ask to work with me to help you find one of these off-market opportunities, I will need to discuss the buyer broker agreement with you.

Advantages of Purchasing Off-Market Homes

Buying an off-market home can be a smart move, especially in a competitive market like the Bay Area. With fewer buyers in the mix, you can avoid bidding wars and potentially secure a better deal (especially since the seller won’t have invested time, money, and effort preparing their home for market in most cases). Off-market properties give you access to hidden opportunities that aren’t publicly advertised, meaning you get a chance to explore homes that most other buyers never even know exist. Plus, with less pressure to rush into a decision, you can take the time to evaluate the home and negotiate more favorable terms. If you’re looking for a more strategic way to find your next home, exploring off-market options could be the key.

In short, off-market homes offer these advantages to buyers:

Reduced Competition: Off-market properties are not available to the general public, so you may have access to unique and exclusive opportunities that others may not be aware of.
Privacy and Convenience: Both buyers and sellers may value the privacy and a more streamlined transaction process that comes with off-market deals.
Flexible Negotiations: Off-market transactions often allow for more flexible negotiations regarding terms and conditions.

Conclusion

In the dynamic and often competitive Silicon Valley real estate market, accessing off-market properties can provide a significant advantage. Through the Compass Make Me Sell program and my connections within the Compass agent network, I can help you discover these hidden opportunities, tailored to your specific needs and preferences. If you’re interested in exploring off-market homes in Silicon Valley, let’s connect and begin your journey to finding the perfect property.