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'Off-market' home sales rise in San Francisco

High demand for off market home sales

San Francisco residents looking to sell their homesbut don't want a parade of real estate agents and potential buyers marching through their propertiesare increasingly turning to "off-market" deals.

These transactions include homes not publicly available for sale. In other words, the properties aren't listed on the Multiple Listing Service. Instead, property information is discreetly circulated among Realtors and possible buyers.

Real estate agents in San Francisco say sellers appreciate the convenience and privacy of such deals.

"I think it's more common in the upper end of the market," said James Maxwell of Coldwell Banker. He added the trend is more prevalent in homes worth at least $2 million. "These are sellers who don't want to go through the marketing of the home," he said.

The "Painted Ladies," a row of historical Victorian homes, are shown with the San Francisco skyline in the background.
Margarethe Wichert | Getty Images

The discreet strategy can pay off for some sellers. For example, a home in San Francisco's Bernal Heights area with three bedrooms, three bathrooms and about 2,300 square feet recently sold "off-market" for $3 million, which was a record price for the neighborhood.

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However, some agents said they don't advise clients to go "off-market" because avoiding a public listing, they argue, can mean some sellers don't clinch the best available deal.

"You don't capture all the potential buyers," said Josh McAdam, an agent with Pacific Union in San Francisco. "You could be leaving money on the table." Still, despite possible disadvantages, McAdam said about 25 percent of his company's deals were done "off-market" last year.

Looking ahead, agents including Matt Fuller of Zephyr Real Estate said 2015 could see a record number of "off-market" sales in San Francisco. Inventory is lean, demand is high and in the City by the Bay, pockets are plenty deep amid a tech boom.

Adds Fuller, "If a seller has a number that they want then they can get it in this market."