Is Facebook the New MLS? Were One-Third of Dallas Sales Off-MLS in 2013?
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The day started with a few tweets from Rob Hahn, the founder and managing partner of 7DS Associates, a boutique management consulting firm specializing in corporate strategy, product management, and strategic marketing for real estate and related industries. Gosh, that’s a mouthful. Rob is one of the nation’s loudest voices for change in the real estate industry, whipping the MLS’s of the nation into shape and technology.
“The MLS industry needs focus and strong leadership to turn its attention away from the noise and concentrate on the serious challenges it faces. It needs a plan of action, one that contains some new and perhaps radical (at least by traditional conservative thinking) ideas. It needs to focus on that plan, execute on that plan, daily – not just once or twice each year at convention time.”
Rob is a Yalie with a law degree. Anyhow, he was tweeting about Dallas this a.m:
“Learning that at least in Dallas area, Facebook might be the new MLS…”
I said, “you talking bout Facebook Friends?”
“No, Facebook Groups and Facebook Business Pages, where agents post their listings #pocketlistings”
Then he went on to say that a top producing Dallas agent, named Erin something, told him “One-third of sales in Dallas last year was off-MLS, so they’re “pre-MLS” or “pocket listings”. Comps can’t be reliable.”
This just brought me round to a post I have been chewing on for months: Facebook Friends. Not any private, closed Facebook Friends in particular, because it seems there are many out there, NOT just the one so well executed by Devin Rambie at Legacy Title.
But I know, and we all know, that homes are being sold and traded through Facebook groups in increasing numbers so much that one-third of real estate transactions are happening this way outside of MLS. And Rob Hahn just confirmed that this morning.
It’s a natural: Facebook has become the new water-cooler gathering place for people of similar interests. So you share a new listing, your Facebook friends see it first, it’s gone: this is a hot market and inventory is pitifully low. So these groups, which started as fun networking groups, have now become the top places to find homes.
I hate to tell agents this but guess what: some consumers are selling their homes on Facebook, too, without an agent!
Consumers ask me all the time: how do I get into these groups to find a home? Well, you can’t. But your Realtor can. So more than ever it is CRUCIAL to have an agent who is hooked, tuned, and plugged in to the networks.In fact, the BEST REALTORS of today may NOT be the ones with the shiny, pricey $7,000 ads in the magazines but the ones with the best Facebook Friend connections! Ask your agent: how many social networking groups are you plugged into? Answer should be at least FIVE!
But this begs the question: will Facebook replace the MLS?
Then Rob said something I think I’ve posted: almost one-third of real estate transactions in Dallas were done off MLS. Private sales, homes that never even made it into MLS.
Could this be because people wanted privacy? Wanted to keep their home sales price out of the MLS now that they are required to be put in? Or did it just all happen so fast?
The problem is, with one-third of Dallas sales off MLS, how in the hec do we get decent comps? And is that leading to appraisal issues?
Or is the steaming market is raising the appraisal tide, when those sales actually get recorded?
“The market is increasing, and there’s no sign of a slow-down,” says veteran appraiser Brian Hagan with D.W. Skelton & Associates. “If it stabilizes, it will be in the 3rd or 4th quarter of 2015.”
Every time Hagan sees a new listing, the prices are higher, he says: Park Cities, Devonshire (smokin’), Preston Hollow, Bluffview, Lakewood. $2.2 million for an acre on Alva Court, in the honeypot of Preston Hollow. There are a couple more sales on Strait Lane, and Erin Mathews just closed Wildwood in Bluffview. The market is buoyant. This year is even better than last year’s record year, and both January and February 2014 sales topped 2013. So keep in mind, if you are buying, sellers are getting full price offers in some price ranges, sometimes more.
What are those hot price points? Hagan says $700K to $1.5. Go over $2.3 and there are fewer buyers, so not as buoyant. After all, Erin did lower Wildwood (above, sigh) to $8,995.000 from $9.75 and then the magic happened. Ryan Streiff with Dave Perry Miller says the 6000-ish square foot family homes built ten to fifteen years ago in Preston Hollow, east of Preston Road, are in direct competition with the newer builder homes fetching full price. There is some price softening on those older McMansions.
Your take-away: Dallas dirt is gold again, and will remain so for at least one more year, according to Dallas real estate insiders.
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Candy –
I think so! Facebook is the new MLS. The trick becomes tastefully teasing clients and prospects with timely properties. Showcasing, but not overwhelming with too much information. Thanks for sharing this article.
Tom –
Yes but tricky, enticing writing has ALWAYS been the way to grab prospects!
There is a gaping hole in Mr. Hahn’s logic: “Erin something, told him…” I’m gonna need more evidence than what some random “top producing” agent told a “Yalie.”
This wouldn’t be that difficult to ascertain. Go to the Dallas County courthouse and peruse the public records for a given period of time of all residential real estate that changed ownership and then compare that to the same period in the MLS.
Until we have that level of research Hahn’s tongue-wagging of some agent’s opinion is meaningless.
Through another tweet Rob confirmed it was Erin Mathews, but I will of course call her and ask.
I have no dought that agents are selling more homes than ever outside the MLS. But it is my perception that this type of activity is most prevalent in the Park Cities and Preston Hollow, where a significant portion of the inventory is priced over one million. The number of qualified buyers for these homes is relatively limited. Word-of-mouth marketing can be effective in marketing these homes.
However, it is preposterous to say one-third of the agent-listed homes in all of Dallas are being sold without being listed in MLS. I believe it is quite rare in neighborhoods where the average sales price is under $600,000. It is rare because it is inefficient.
I agree with Scott’s comments below about more research being needed. But make no mistake: when we post a ‘coming soon’ on our Facebook business page, especially with video embedded, we get thousands of hits, and usually about 100-300 video views, before the property hits the open market. That’s all well and good to generate ‘buzz’, but we still believe firmly in the MLS.
MLS should launch MLSarea chat rooms where properties can be discussed by Realtors!
They could do soooo much more!