Watch to find out the 3 reasons.

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It’s understandable why the rich, especially the ultra-rich, tend to be reclusive people. But one LA broker has revealed that this attitude also extends to the way they buy and sell their homes.

To be clear, the public listings are no stranger to some high-profile homes for sale. The Chartwell Estate in Los Angeles, for example, was listed at $245 million, the most expensive in the US before it had a major price cut. And in the Hamptons, the most expensive house for sale there is listed at $150 million.

However, for the most part, the rich prefer to shop around or part from their multi-million dollar homes through whisper listings, also known as pocket listings.

These are homes that aren’t publicly listed for sale and, as the name “whisper” implies, both buyers and sellers go entirely by word of mouth.

Aaron Kirman is a veteran whisper listing agent based in Los Angeles. He revealed to Business Insider three main reasons why the rich prefer to stick to whisper listings when selling.

Kirman definitely knows what he’s talking about. In his 24 years in the industry, he’s managed to sell more than $4.5 billion worth of real estate and is the top agent at real-estate company Compass. REAL Trends even named him the 10th-best real estate agent in the US by sales volume in 2019.

1 – Sellers have a better chance of getting a higher price

The seller can avoid value expectations by not going public. Sellers can even set prices that are way above the area’s median listing price, regardless of the existing state of the market.

“If you go live on the market, you have to publish a price. By not going live, you’ve never been public on a price so you don’t necessarily have to go down. I’ve had sellers up the price of a whisper campaign because they have nothing to lose,” Kirman said.

2 – A seller can avoid public relations complications through whisper listings

Because of the private nature of whisper listings, any complicating factors that the seller may not want the public to know, such as political reasons or in the case of a divorce, whisper listings are ideal.

Kirman said, “Sometimes there are political reasons as to why people don’t like them on the market whether it’s divorce, business reasons, or they just want to keep it quiet.”

3 – Whisper listings are often seen as a status symbol

Sellers are attracted by the fact that whisper listings are more exclusive compared to public listings. But Kirman cautions sellers against going for whisper listings just for the sake of exclusivity.

For one, the seller could miss out on a lucrative sale because the agent may not know the right person.

“The thing is, I don’t know everybody. So I always tell people there may be that one multimillionaire or billionaire that, because you’re not out there [on the public market], you missed — and they will go buy another house that was public,” Kirman clarified.