On a prestigious block in the West Village in a prewar doorman building, the four-bedroom three-bath apartment has been completely renovated and is large enough for a young family.
But there is a hitch. It is not for sale. At least not officially.
Ms. Ball, who is married and has three children, is interested in selling her apartment, but she is not interested in putting it on the market.
She is one of a small group of owners, who, often working closely with brokers they know from past deals, try to avoid the hassle of showing their homes by letting it be known that for the right price, they would be ready to move on. For Ms. Ball, the right price is anywhere from $3.5 million to $4 million.
Among brokers, such a transaction — in which a seller informally engages a broker but doesn’t sign a contract — is referred to as a “pocket deal.” If the broker finds a buyer, he or she will be paid a commission, but there will be no online listings, open houses or advertising of the property.
What the seller wants from the arrangement is a buyer who can meet the asking price, ideally in cash, and be ready to act quickly. Brokers say these deals — happening all across Manhattan, on multimillion-dollar Park Avenue co-ops as well as chic TriBeCa lofts — are interesting more sellers these days.
There are many reasons a seller might take the pocket-deal route. Some are afraid that if they list the apartment and it does not sell for weeks or even months, it will be considered tarnished. Others fear that with buyers expecting bargains, they will be besieged with low-ball offers. Some do not want to keep their homes primped and primed for constant showings. Still others know that potential buyers often fail to get financing at the last minute, thus wasting months.
And, of course, there are some who are holding out for the price they were fantasizing about before the market fell.
Some brokers say pocket sales are increasing because listings for desirable inventory are low. Inventory shrank after a small boomlet last spring, when many owners accepted the reality of the market, priced their apartments accordingly and saw them sell. This spring, it seems, many of those listing their apartments believe the market has recovered more fully than it actually has, and are overpricing their properties.
“It is not that there is a lack of inventory, period,” said Jeremy V. Stein, a broker at Sotheby’s International, who, along with his wife, Robin Stein, is working with Ms. Ball to find potential buyers. “It is that there is a lack of inventory priced right.”
Yet for all the explanations that sellers may offer to justify keeping their homes off the market, pocket deals are frowned upon by many in the industry.
“I do not think this is a really good way for most people to sell their apartment,” said Pamela Liebman, the president of the Corcoran Group. Often, she said, a person who declares an interest in selling an apartment without listing it is not serious. In many cases, brokers find that these deals are not worth the trouble. Instead of using the tried-and-true tools for moving Manhattan properties, like advertising them and holding open houses, brokers are forced to play matchmaker — and in this city, where real estate passions run hot, it isn’t easy being Cupid.
“I think ultimately the sellers hurt themselves,” Ms. Liebman said.
The term “pocket deal” usually implies that a broker is intimately involved in working with the seller, despite the lack of an official listing. But sometimes property owners just put the word out on the wind.
For instance, the owners of a mansion at 16 East 69th Street, once owned by a member of the Vanderbilt family, never signed an exclusive deal with a broker. But they let it be known that if a broker had a client who might be interested in the house, he or she could show the property. In the end, although various brokers took clients through, no broker was given a commission on the $47 million sale.
Decades ago, when co-brokering was not a common practice, not listing a property was a way of controlling the buyer pool, and often a means of racial or ethnic discrimination. Now, even those who dislike pocket deals say they find no evidence of their being used to discriminate. The Real Estate Board of New York has a set of rules that member brokers must follow when they sign a contract to sell an apartment, established in part to ensure fairness.
John Doyle, the board’s senior vice president for government affairs, said that by far the most common course was for an owner to sign an exclusive written agreement with a broker.
“If they have signed a deal giving the broker an exclusive right to sell,” Mr. Doyle said, “then the seller has to pay the broker even if they brought in the buyer.”
Article source: http://feeds.nytimes.com/click.phdo?i=f0c720c91c1240438cced5785051bfb7