Whether it’s a penthouse or a purse, visibility matters: Exclusive

July is Luxury Month at Inman. We’ll take the temperature of the luxury market, talk to top producers in the ultra-luxury space and dive into the luxe trends of today — all culminating at Luxury Connect in San Diego, where we’ll announce this year’s Golden I Club honorees.

Reading through the headlines this past week, one story stopped me in my tracks. The original Hermès Birkin bag — the actual prototype made for Jane Birkin — is up for sale (Editor’s note: It sold yesterday). It doesn’t take my background in luxury fashion reselling, working with both eBay and Tradesy, to tell me this bag will go for an astronomical price.

Today’s Birkin bags are notoriously valuable and elusive to obtain — and this is the original. But despite being a true one-of-a-kind item with a uniquely rich history, its owners have decided that mass public visibility is the best way to maximize its sale price and initiate a bidding war. 

This is a masterclass in why maximum exposure matters in marketing a valuable item.

How private listings ignore the law of supply and demand

Meanwhile, I also heard a story recently about a property listing that set a price record. The listing agent sent it to 30 of his friends, and only those people got to view the house. It was ostensibly a phenomenal listing because it went for a record high price, and the buyer even paid transfer tax. Seems like a great outcome on the surface, doesn’t it?

That is, until you back up and recall the basic logic of the Hermès Birkin bag — or the sale of any other major asset, for that matter. The home set a record with a pool of only 30 agents. On the open market, is there any reason why the seller couldn’t have set an even higher record with a broader pool of potential buyers?

If 30 agents could garner that much interest, how much more interest could countless agents and potential buyers have garnered? And what about all the qualified buyers who didn’t happen to have an “in” with this agent? How is it optimal to restrict access to the select few your agent deems worthy and risk losing out on potentially stronger offers?

Private listings such as these are hotly debated in the residential real estate industry right now. Historically, the vast majority of homes have been posted publicly to the MLS, which makes those properties available to a public pool of agents and consumers within 24 hours of the seller agent marketing the property for sale.

But more recently, certain large real estate brokerages are pushing sellers to begin listing their properties privately, claiming that it’s advantageous to the marketing strategy — despite what the basic logic of supply and demand might tell us.

Some in our industry have lost the plot; this is not the path to innovation in the housing industry. We have to do what’s best for the consumer and maximize value for them today.

Those in real estate have something to feel good about as of the last few weeks. Inventory is up in many markets for the first time in six years. More inventory is the lifeblood of real estate.

For buyers, it means more options and potentially more room at the negotiation table. For sellers, it means more comparables and a stronger understanding of your home’s current value.

A key way we know inventory is up and can make the best decisions for our clients is the transparency created by public marketing on the local MLS.

The private listings fairy tale

However, some in our industry seek to push data restrictions by suggesting marketing the home quietly and privately is the only way to go. I understand the fairy tale: When it’s time to sell our home, often our most valuable and emotionally tied asset, we want a magical buyer to emerge that pays a record amount, strictly on our terms, as discreetly as possible. But often it is just that, a fairy tale, and one that is costing homesellers time and, potentially, money.

The truth is, you do not know exactly who is going to bring the strongest offer to your home.

Sellers absolutely need a choice, and there are a small percentage of homes where privacy is paramount, but it is a much rarer occurrence than some brokerages will tell you. They will say there is no downside to testing on the private market, but time spent receiving offers without a full understanding of the market value sounds like a considerable negative to me.

Marketing a property requires a stronger, more informed approach than restricting access. Trusted agents working with their clients on strategies that tailor their individual needs paired with elevated, far-reaching marketing is the winning strategy.

Because when you are offering the American Dream — whether that’s a home or the original Birkin — the value of full exposure is priceless.