Average sale price for single-family homes from 2/2024 to 4/2024, compared to the period from 2/2025 to 4/2025.
Price per square foot ratio for single-family homes from 2/2024 to 4/2024, compared to the period from 2/2025 to 4/2025.
Average Sale Price
2/2024 - 4/2024 2/2025 - 4/2025
Price/Square Foot Ratio
2/2024 - 4/2024 2/2025 - 4/2025
Source: MLSListings, Inc., as of May 1, 2025 Criteria: Single Family Residential
Atherton Los Altos Los Altos Hills Menlo Park Mountain View Palo Alto Portola Valley Redwood City San Carlos Sunnyvale Woodside
Atherton Los Altos Los Altos Hills Menlo Park Mountain View Palo Alto Portola Valley Redwood City San Carlos Sunnyvale Woodside
an important question: Why would commission-based agents engage in practices that are likely to result in a lower sale price?
The answer is simple: By orchestrating off-market deals, agents can often collect commission from both the buyer and the seller. This results in more money in the agent’s or brokerage’s pocket even if the final sale price is substantially lower. In these cases, their personal financial incentives directly conflict with their fiduciary duty to maximize the seller’s sales price.
Why Do Agents Like “Hidden,” “Pocket,” and “Office Exclusive” Listings?”
There are three main reasons why agents are drawn to “office-exclusive,” “pocket,” or off-MLS listings:
1) More Commission — The agent and/or the brokerage significantly increase their chances of representing both the buyer and the seller when a property is kept off the open market. This dual representation allows them to potentially collect the full commission—or at least a substantial referral fee—on both sides of the transaction.
2) Appealing to Strategic Buyers — Agents or brokerages can attract buyers seeking a lower price by offering access to exclusive, non-public listings that are hidden from a broader pool of qualified buyers. Reduced market exposure and limited competition usually translates into lower sale prices—an appealing prospect for buyers looking to secure a deal.
These off-market opportunities allow agents to charge higher commissions. It is not uncommon for buyers to agree to pay buyer’s-side commission of 2%, 2.5%, or more if they believe these "hidden" listings could sell for 5% to 8% below market value due to the lack of competition.
3) Reduced Costs — Under the MLS’s “Clear Cooperation Policy,” agents are prohibited from advertising a listing, or even informing agents from other brokerages of its availability, unless the property is on the MLS within 24 hours of the public dissemination of the information. By keeping listings off-market, agents not only increase their chances of
earning a second level of commission—or at least a substantial referral fee—from the buyer’s side, but also save on marketing costs.
The California Association of Realtor’s (C.A.R.’s) Position
While some agents resort to intimidation tactics or make disingenuous threats of group boycotts to pressure sellers into pre-committing to specific buyer-agent commissions— including commissions payable to the listing agent if the buyer comes to them directly—the California Association of Realtors has taken a much more client favorable and ethical position.
Like DeLeon Realty, C.A.R. maintains that listing agreements should not include any pre-set commission offered to the buyer’s agent. After all, buyers are now required to negotiate and agree to the compensation they will pay their own agent. In fact, C.A.R. has even removed the section in its standard listing agreement that previously obligated sellers to offer commission to the buyer’s agent. Nevertheless, some agents seeking to preserve the traditional commission model, irrespective of the massive court loss and terms of the settlement, continue to use alternative forms, such as those provided by PRDS, which still include that outdated and potentially problematic line by which the seller pre-commits to a minimum commission to the buyer’s agent.
DeLeon Realty’s Position
C.A.R’s position is also closely aligned with DeLeon Realty’s view that sellers should welcome all offers, most certainly including those in which the buyer requests the seller to cover some or all of the commission the buyer owes to the buyer’s agent. Like the price and contingency periods, this commission request becomes a point of negotiation.
One might ask, what’s the difference? The key distinction is that buyers are unlikely to request more than they have already agreed to pay their own agent, unless the seller has pre-committed to offering a higher amount. Additionally, DeLeon Realty is the only major local brokerage that always gives self-directed buyers the option of submitting an offer through one of our buyer’s agents with neither the buyer nor the seller paying any commission to the buyer’s agent. DeLeon Realty covers all the in-house buyer’s agent’s compensation.
Clandestine Counter-Arguments
It is noteworthy that DeLeon Realty, along with the national press, have published numerous critiques of secretive “office exclusive” listings and agents pressuring sellers to commit to any minimum buyer’s agent commission in the listing agreement. However, other agents' disingenuous counterarguments supporting these questionable tactics typically surface only in private conversations with clients. Tellingly, agents are reluctant or unwilling to put these positions in writing, or respond to press inquiries.
On multiple occasions, we have proposed that Compass’s Palo Alto office manager and I co-present a seminar on how the DeLeon approach differs from Compass’s approach. Unfortunately, to date, this manager has yet to agree to such a public discussion. However, the messenger is not important— it is the message that matters. If the Compass manager would feel more comfortable having a conversation about the services, marketing strategies, commission structure, and views on limiting sales only to buyer’s represented by a Compass agent with Ken DeLeon instead of me, we are more than happy to accommodate that request. Alternatively, if Compass would prefer a different office manager to participate in an open and candid discussion comparing Compass’s business philosophy with that of DeLeon Realty, we would gladly participate.
The Take-Away
Withholding listings from the majority of interested buyers is inconsistent with the seller’s best interest and almost certainly the agent’s fiduciary duty to their sellers unless the seller is informed that the reduced exposure and competition will likely sacrifice sales price for privacy.
Imagine that an agent or brokerage with a 15% market share knows of three buyers who would love a home just like yours. Irrespective of which agent the seller chooses to list with, all three buyers would know about the home if it’s placed on the MLS. However, by withholding it from the MLS, as well as websites like Zillow, Redfin and MLSListings. com, the seller would effectively exclude the other 20 potential buyers, those who are either represented by agents from other brokerages or who aren't yet working with an agent at all.
When you list with DeLeon Realty, your home will be featured on the MLS, Zillow, Redfin, and many other public-facing websites. Interestingly, it will also appear on Compass’s website, Coldwell Banker’s website, and almost all other websites that showcase properties for sale. Additionally, we regularly advertise our listings across multiple channels, including newspapers, this newsletter, direct mail, TV and streaming ads, social media, and radio. Plus, our extensive network of potential buyers helps us attract those who may love a home like yours, but are looking in a different area or are not actively searching at the moment.
Personally, I would enjoy watching a spirted debate in which a Compass manager argues the alternative position. Namely, that it is in the Seller’s best interest to withhold the listing from any buyer not working with a Compass buyer's agent and to do no public marketing outside of their brokerage.
Make no mistake: I firmly believe that agents who suggest limiting exposure to only buyers working with them or their brokerage are generally not concerned about your privacy or best interest—they’re focused on increasing their commission, even if it means a significantly lower sale price.
Off-Market Listings: A Hidden Sale or a Discriminatory Practice?
By Ken DeLeon, Esq. & Recent Stanford GSB Graduate
Although it has been empirically shown that homes sold off-market—without being listed on the Multiple Listing Service (“MLS”)—tend to command significantly lower prices, few analyses delve into the underlying causality of the pricing disparity. While limited market exposure is an obvious factor, there is growing evidence to suggest that structural racial inequities embedded within off-market practices, may also be contributing to these disparate outcomes.
It is well known that highly educated immigrants, and tech workers relocating to Silicon Valley, are an important, welcomed, and significant component of the buyer pool that have contributed to the high demand for Silicon Valley real estate. Therefore, any practice that could exclude these potential buyers’ access to homes could result in a significant financial impact on the seller, not to mention a moral impact on society.
Multiple studies have confirmed that homes not listed on the MLS consistently sell for less. A recent Zillow report released two months ago confirmed that offmarket properties consistently sold for less than those
listed on the MLS—with California exhibiting some of the steepest discounts nationwide.1 Notably, this trend held across all price tiers—including the luxury segment—refuting the commonly asserted argument that affluent buyers will pay a premium for exclusivity. Over the 2023-2024 period, Zillow estimated that sellers lost over $1 billion in sales proceeds by forgoing the broader MLS exposure. Id.
One of the most comprehensive analyses— comparing 840,000 on- and off-MLS home sales across multiple states over several years using data from Bright MLS—revealed similar results.2 This rigorous study excluded flips, new construction, and intra-family transactions to ensure accuracy. It concluded that homes listed on the MLS sold for an average of 13.0% more than off-market properties. Id. This premium for being on the MLS rose to 19.7% during high-demand months such as spring, highlighting the value of broad market visibility. Id.
Although it is inherently logical that reduced exposure and competition results in lower sales prices, what is less obvious is that the intentional concealment of certain listings from most interested buyers results in the disproportionate exclusion of home buyers who are newer to the community. While this excluded group includes many younger families from the tech community that are newer to this area, it also limits access to certain ethnic groups, reducing diversity and potentially creating unequal opportunities within the housing market.
A Closer Look at Local Markets
To better understand the implications at a local level, we examined off- and on-market 2024 sales in Menlo Park and Palo Alto—two of Silicon Valley’s more active housing markets with a notable volume of off-market transactions. Smaller towns such as Atherton and Los Altos Hills were excluded due to a statistically insufficient sample size.
The findings mirrored broader trends. In Menlo Park, homes sold off-market had a median sale
price of $2,500,000, compared to $3,200,000 for homes listed on the MLS—a staggering 21.9% discount. Even measured by price per square foot, off-market sales lagged by 14.1%.
Town Median Price
Menlo Park (on MLS)
Menlo Park (off-market)
Median Price/ Sqft
$3,200,000 $1,618
$2,500,000 $1,390
In Palo Alto, the discount was smaller, but still meaningful. Off-market homes sold for a median of $3,514,500, compared to $3,695,000 for those on the MLS—a 5.2% difference. On a per-square-foot basis, the gap was 5.7%.
Town Median Price
Median Price/ Sqft
likely to promote off-market listings. For some, these listings offer a way to reduce marketing expenses while potentially increasing commissions, as off-market sales are frequently double-ended, meaning the same agent or brokerage represents both buyer and seller.
The ease and lucrative nature of off-market deals are particularly attractive to veteran agents. These legacy professionals, who often share the same racial background as their sellers, may (hopefully unintentionally) perpetuate a lack of diversity and inclusivity within the pool of potential buyers. This raises the question: are off-market sales inadvertently excluding more diverse buyers?
To explore this, I analyzed surname data from recent sales in Menlo Park and Palo Alto to identify potential ethnic representation differences between MLS and off-market transactions. An analysis of the data sets for Menlo Park and Palo Alto revealed a higher percentage of surnames associated with ethnic minorities among buyers purchasing through the MLS compared to those buying off-market properties.
In Menlo Park:
• 58% of the 291 homes sold on the MLS had buyers with surnames associated with ethnic minorities.
• Only 29% of the 48 homes sold off-market fell into the same category.
In Palo Alto:
Although I graduated from Stanford's Graduate School of Business, I am not a professional statistician. Further research should be done by statisticians to confirm and expand upon these findings.
Limited Visibility, Limited Opportunity
Off-market listings often remain within an agent’s internal network—typically shown only to their own clients or, at most, to others within the same brokerage. Some agents use these secret listings as bait to attract buyers with the promise of lower prices due to reduced competition.
Who Gets Access to Off-Market Properties?
Based on both industry experience and research, more traditional and long-established agents are more
• 73% of the 366 MLS sales had ethnically diverse surnames.
• Just 37% of the 52 off-market sales reflected the same diversity.
Advocating for Asian and Pacific Islander Homeownership with AREAA
By Francis Lopez
Every May, we celebrate Asian American, Native Hawaiian, and Pacific Islander (AANHPI) Heritage Month. Serving clients in the San Francisco Bay Area Peninsula, we understand the importance of this community, as AANHPI’s individuals make up over 42% and 34% of the populations of Santa Clara and San Mateo Counties, respectively.*
In honor of AANHPI Heritage month, we are highlighting an organization DeLeon Realty has supported over the years: the Asian Real Estate Association of America (AREAA).
AREAA is a national trade organization dedicated to improving the lives of the AANHPI community through homeownership. AREAA creates a powerful national voice for housing and real estate professionals to work together to promote this goal. Since its founding in 2003, AREAA has quickly grown to over 19,000 members across 45 chapters in the US and Canada, making it the largest AANHPI trade organization in North America.
AREAA has two chapters serving our area: The Silicon Valley and San Francisco Peninsula chapters. Both chapters host events open to AREAA Members, real estate professionals, and the public. These events include educational speakers for real estate professionals and expos where the public has the opportunity to connect with industry experts to gain valuable insights on homeownership and wealthbuilding through real estate.
This May, representatives from AREAA chapters, including our local chapters, will travel to Washington DC, where they will have the opportunity to meet with our Congress members and advocate for policies that promote AANHPI homeownership. In previous years, AREAA led the successful “No Other” Campaign, which resulted in the U.S. Census Bureau placing Asian Americans as an “Other” category in the Census’s quarterly housing report. Since this
change in 2016, AREAA has continued to build on this success, pushing for more policies that can aid the goal of sustainable AANHPI homeownership.
A few years ago, I joined the AREAA Silicon Valley chapter after hearing many great things from DeLeon Realty’s own Audrey Sun during her time on the Board of Directors. Since then, I have served on the Board as a Director and Secretary, and I am honored to have been named AREAA Silicon Valley’s Member of the Year for the past two years. Beyond making a meaningful impact on the Asian American community, my work with AREAA has allowed me to connect with many amazing agents, creating valuable connections for DeLeon Realty’s listings.
I’m excited to continue supporting the AANHPI community through AREAA and look forward to attending this year’s Washington D.C. trip with three of my colleagues from DeLeon—my first trip in DeLeon Realty’s newest plane.
*Data based on July 2024 estimates from the US Census Bureau.
Francis Lopez (left) receiveing an award from Viral Vora (right), the 2024 AREAA Silicon Valley Chapter President, as the AREAA Silicon Valley Chapter Member of the Year for 2024
