Will you find this as shocking as I do?

Hey, did you hear about the shocking report from Zillow that claims selling your home off-market will cost you on average 1.5% of the sale price?

What’s shocking to me about that is that they say it ONLY costs 1.5% of the sale price…on average. To be fair, they say that in California, the average is 3.7%, which given our prices here, that’s a lot of money.

I find this surprising because there’s a much-cited 2021 report from BrightMLS (one of the largest MLS systems in the country) which says that actually, sellers who forgo listing on the MLS sell for an average of 16.98% below “on-market” prices. What could explain such a huge difference? Clearly, there’s a fly in the ointment in one, the other, or both of those studies.

Another reason I find Zillow’s report to be eyebrow-raising is because if it is true that the off-market haircut really is only 1.5%, or 3.7% in the case of California – would this not mean that in many – or most – cases, that sellers actually net more money at closing by selling off the MLS?

Because I believe that’s what Zillow’s report actually shows.

Here’s the thing: when you list on the MLS, you’re usually committing to a significant investment of effort and money. In most cases, you’ll prepping the home for sale (paint, landscaping, decluttering, perhaps new flooring, lighting, etc.), staging, and who knows what else.

All those things cost money. Depending on the condition of your home, those prep expenses can easily eat up 1% to 3% of your sale price, if not more. I don’t often see anyone spend less than 1% on such work, and it’s not uncommon to spend more than 3%.

Not to mention, when you list your home on the MLS, there’s a much greater likelihood you’ll be paying higher commission costs, which is another chunk of your proceeds. Off-market deals often involve lower commissions (due to potentially fewer agents involved), or perhaps even no commission if you sell your home completely on your own without an agent representing either buyer or seller.

So yes, the sale price will probably be higher on the MLS, but when you subtract all those extra costs, you would quite likely net less at closing….if Zillow’s numbers are to be believed (cough cough, keep reading).

And even if you net more at closing going on the MLS, the fact that you might be able to skip all or most of the hassle of prepping your home for market, and enjoy greater privacy during your sale, might be worth 1-2% of your home’s sale price, depending on your preferences and circumstances.

I would be remiss if I didn’t point out that Zillow’s study is based on Zestimates as a benchmark for market value, which, let’s be real, are pretty hit or miss (a broken clock is right twice per day, after all). I can’t tell you how many times I’ve had to explain to a seller why their Zestimate is way off from what buyers are actually willing to pay. Relying on Zillow’s pricing model to say that on-MLS sales make a certain percentage less than off-market sales…that’s not data you’d want to take to the bank.

So, if you’re thinking of selling, how do you balance all of this? How do you maximize your exposure and create buyer urgency and a sense of competition without committing to all those costs and fees right from the get-go? Well, this is where the Compass Three-Phase Listing Strategy really shines.

Instead of just throwing your home on the MLS and hoping for the best, this approach rolls out your listing strategically in three stages. First, there’s the Private Exclusive phase, where your home is quietly shared with a network of Compass agents and their qualified buyers, giving you a chance to test the waters and perhaps landing an acceptable offer before ever going public.

Then comes the Coming Soon phase, where it’s marketed within Compass’s ecosystem but also shared with the larger brokerage community, building anticipation before it officially hits the market (and when it can be publicly marketed, but off the MLS).

And finally, if you haven’t secured the right offer yet, your listing goes live everywhere—on the MLS, all the major listing sites, and pushed out to the full buying audience. By following this approach, you get the best of both worlds—the option for an off-market sale with less fanfare and hassle yet still a strong net return, while still keeping the MLS as a tool in your back pocket if you need it.

In fact, according to Compass, homes sold by Compass that used either or both the Private Exclusive or Compass Coming Soon pre-marketing phases sold for an average of 2.9% higher than homes which did not – and sold 20% sooner, with 30% fewer price reductions (and price reductions are a known destroyer of sale prices).

At the end of the day, selling your home isn’t just about getting the highest price—it’s about walking away with the most money in your pocket, with the least amount of hassle, risk, and stress.

That’s why it’s so important to look beyond just the top-line sale price and really think through your net proceeds and overall selling experience. If you want to talk through your options and figure out the best strategy for your specific situation, let’s chat. There’s more than one way to sell a home—and the right approach could mean thousands more in your pocket at closing.

‘Tis the season, after all.