The Real Deal New York

Hush money

Owners are selling their homes without putting them on the market, and not just at the high end
By Mark Maurer | July 04, 2014 07:00AM

The so-called “whisper listing” is a longtime staple among New York City sellers looking to quietly unload a high-priced luxury residential property.

But new market conditions in Manhattan mean that off-market deals are becoming more common among the masses and are no longer limited to the top end of the market. Douglas Elliman broker Jacky Teplitzky and other industry insiders said that these days, off-market deals are happening for homes priced as low as $1 million — a large chunk of cash, no doubt, but far below the threshold of a luxury property in Manhattan.

“We know the quiet deals are happening more and more,” said Teplitzky.

There are a variety of reasons why sellers unload properties without officially listing them. Sometimes they are in financial distress; other times they are celebrities or public figures hoping to keep the news quiet. But, increasingly, many of today’s sellers are going off-market for a different reason: to take advantage of strong demand in a hot market. Manhattan’s ongoing shortage of apartments for sale is empowering sellers to avoid the hassle of advertising a property, as well as shirk paying commission to a listing broker.

In these scenarios, the doormen and superintendent often (literally) hold the key to connecting a buyer to a seller. “Doormen know everything happening in the building,” Teplitzky said. In some scenarios, a broker will meet with a seller in an effort to get the listing, then never hear back — only to discover that the seller made a deal without an agent.

Brokers argue that listing the property will mean selling it at a higher price, something that’s especially important to owners of lower-priced homes. “The only way to maximize your selling price is by exposing the apartment to the maximum number of buyers,” Teplitzky said.

Still, sellers may also not want to list because they are fearful of signing an exclusive agreement with a broker, or they’re concerned that a six-month commitment to a broker is too long, said Ryan Fitzpatrick, director of sales at CORE. They may also be afraid that, even in this market, their property could languish on the market for 60 to 90 days without selling, he added.

“It’s another manifestation of this very tight inventory,” Fitzpatrick said. “Sellers realize they have a lot of sway where there is such strong demand.”

Buyers, of course, have only upsides when it comes to finding a whisper listing, as it allows them to dodge the competition and avoid a bidding war. “On the buyers’ side, there is a perception they are getting a special opportunity: a one-shot deal in which they can get in and get out, and lock it up. And they’re willing to pay a premium for it,” Fitzpatrick said.

Tamir Shemesh, a broker at the Corcoran Group, said he recalls two examples in the past month in which sellers opted not to list their units: two Greenwich Village condominiums worth roughly $3 million and $5 million. “Sellers are getting high offers,” Shemesh said. “But when they price the apartment way too high, they get resistance. If they overprice an apartment, it will not sell.”

Monique Silberman, a Town Residential broker, estimated she receives about five phone calls a week from prospective buyers that she is representing who are looking for off-market listings. She said the majority of off-market deals continue to occur on those ultra-luxury properties. “It’s sort of serendipitous the way it all works out,” she said.