Ben Moss ()
Ben Moss deals in luxury and discretion.
As managing director of sports and entertainment at One Sotheby’s International Realty, his client list resembles a roster of professional athletes and celebrities. Their business is lucrative with transactions often hitting the millions of dollars and yielding hefty commissions.
But there’s a catch. High-profile customers want their business dealings off the radar.
“You’re seeing more and more of that, especially on the high end. Sellers of very expensive real estate know it’s going to take a very unique buyer to purchase the property. Even with pre-approvals, they’re careful and don’t want people tracking through their house,” Moss said. “It’s a matter of privacy.”
That’s why pocket listings, or off-market sales, are on the rise—up about 10 percent in the last year in South Florida. Properties are brought to market but kept off the Multiple Listing Service. They’re marketed directly by brokers who keep tight control over viewings, publicity, potential buyers and other aspects of the sale.
Brokers say the deals can have plenty of pitfalls.
“It’s iffy. It has a lot of potential, but it’s also very problematic on a lot of levels,” said Toni Schrager, a top producer at Avatar Real Estate Services LLC. “I once had an NBA player tell me, ‘Bring me $15 million, and I’ll sell the house.’ I brought the buyer, but he turned around and said, ‘I want $15 million net. Where’s your commission?’ He knew going in my commission was 6 percent. My client was so upset that I lost a $15 million buyer.”
That’s only one potential hazard. Some high-net worth clients want no paper trail during the marketing and refuse to sign agreements with brokers. The industry is rife with stories of buyers and sellers striking independent deals that squeeze out the brokers and reports of sellers who back out of deals at the last minute or arbitrarily change prices.
“What’s happening in the South Florida market is the inventory is very low. There are more buyers than sellers. It’s important for all real estate professionals to have their ear to the ground because you hear about listings prior to them being on the market,” said David Pulley, broker at Fort Lauderdale-based Opulence International Realty Inc. and former star of Style Network’s “Hot Listing Miami” series.
“But at the end of the day, I don’t see it as an effective way to sell a property. The right way and most effective way is to list it so it’s open to as wide a platform as possible and gets the most exposure.”
Jill Hertzberg agrees. The Coldwell Banker broker is one of the “The Jills,” a real estate duo who has sold more than half of all Miami-Dade listings above the $15 million mark since September.
“If you look at the market all over the city, the highest and best sales are represented by exclusive listings,” Hertzberg said. “Pocket listings protect privacy, but they don’t bring you higher prices.”
That’s the rub, brokers say. When dealing with celebrity clients, speed and even price often take a back seat to privacy. Brokers in the Master Brokers Forum, an invitation-only group whose members have produced $5 million in sales for five consecutive years, say pocket listings are lucrative but time-consuming. The deals typically take three times as long to close and are labor intensive, they said.
In one of his last off-market transactions, Moss said a professional basketball player recruited him to find a seven-bedroom estate with at least an acre of land. The deal turned out to be worth $7 million, but it required the broker to work quietly for months.
“I basically used the old-school method of finding suitable properties on the tax list and getting in touch with the owners,” Moss said. “I sent out letters to owners of houses that I researched and found those who were open to selling but hadn’t put together any listing. I took photos of those worth bringing to my client and put together a package with floor plans and background on the builders.”
One year and several confidentiality agreements later, his client closed on a $7 million mansion in Broward County.
“Buyers come to us with specific results in mind,” Pulley said. “South Florida’s limited inventory and market surges naturally lead to pocket listings. But if a property never hits the market, it limits what we can do as real estate professionals.”