A pocket listing, also known as an off-market listing, is any listing that is retained by a listing agent and not listed on the Multiple Listing Service (MLS). Instead, the agent tries to market and sell the home within a private or select network. In other words, it’s a real estate listing that isn’t made available to the general public.
Is a Pocket Listing the Right Move?
Listing in the MLS has its advantages, but it’s not always the best choice for sellers.
The number one reason to consider using pocket listings is to maintain your anonymity. Say you’re a local politician, judge, or celebrity. Chances are you don’t want to make your personal information public information. Disgruntled individuals or obsessive fans can use the opportunity to visit the home sheerly for kicks or to learn more about you.
Keeping the property out of the public listing is also an excellent idea for someone with a particularly interesting property. Multi-million dollar homes and unique properties are sure to draw in people who are just trying to take a look with no intention of making an offer.
Or say you’re just the average person who already knows of people who may be interested in buying your home. It can be a relative looking to get their start or someone close to you that’s been waiting for you to sell.
Why would you want to publicly list the home to draw the attention of buyers before they have an opportunity to make an offer? Instead of potentially wasting other buyers’ time, you hire an agent to facilitate your end of the transaction in a straightforward manner, however there is potentially dual-agency—which can also double as a con if the agent isn’t ethically driven.
Another benefit to using pocket listings is that they serve as a way for agents to market the home before it’s ready for sale. Say you’re performing some extensive repairs, the agent can use pocket listings to get buyers interested and warmed up to your asking price long before you officially list it. This “premarket” strategy is advantageous because you’re less likely to spend a long time with the house listed publicly while you wait for someone to make the offer you’re looking for.
Why You Might Consider Another Route
While the pros are short for pocket listings, that doesn’t mean they aren’t the perfect option for some sellers. If you’re still on the fence, you might want to consider the reasons that make the MLS listings a desirable route to take when marketing your home.
The most obvious thing to consider is market exposure. Remember that the property isn’t being marketed to the general public. Instead, you and your agent are responsible for marketing the home privately. That means no open houses, non-conventional advertising, and no listings on sites like Realtor or Zillow.
That particular ailment also may mean that you aren’t likely to get the best possible price for your home. Remember that you have fewer potential buyers to negotiate with, and you won’t be able to work between offers to ensure that you get the best possible price. Keep in mind that the agent will work to make a deal in your best interest, but that doesn’t mean they can guarantee to get you the deal you’re looking for when working with limited private buyers.
You may also keep in mind that the National Association of Realtors has imposed a ban on pocket listings. That means you may not be able to work with a licensed Realtor in this sort of transaction.
If you are the agent, you must educate the seller. People aren’t afraid to associate pocket listings with poor ethics. In fact, that’s a commonly addressed con of this form of transaction. It’s your job to make sure your client understands that they’ll get fewer bites, tours, and actions on the listing because your listing is a “quiet one.”
Not generating as much action might be discouraging to some sellers, but you should remind them that it’s quality, not quantity. Say you’re listing a multi-million dollar home or one that’s in an exceptionally coveted area. By keeping things private, you’re able to keep timewasters out while bringing in folks you know are genuinely interested and more likely to make an offer.
Pocket Listing FAQs:
Now that you know all about what pocket listings are and if you should or should not take that route, here are a few more frequently asked questions and answers about pocket listings.
Is a pocket listing illegal?
No, pocket listings are not illegal, but that could change if the agent fails to act with the client’s best interest in mind. According to the National Associate of Realtors, who banned the practice for its licensed realtors, the act in itself isn’t illegal. However, suppose the objective of the acting agent is to profit from the opportunity in order to collect the inflated commission and not to act in the best interest of the clients. In that case, it can result in legal repercussions.
How do you find pocket listings?
By nature, there are no public listings or information available for pocket listings. That means you need to rely on networking to find them. Your best bet is to establish a relationships involving agents with deep network ties as they are more likely to catch wind of these “private” listings through their own connections.
How do you market a pocket listing?
Despite what you might initially believe, there are plenty of ways to market pocket listings. Targeted demographic marketing using advertising platforms like Facebook and Google, exclusive advertising with traditional media outlets, and networking are just a few. If you want to learn more, consider reviewing our post entirely dedicated to marketing pocket listings that will be coming to this page soon!