Ever heard of a "Pocket Listing"?
In real estate, a seller who wants to sell their home will usually contact and hire an agent to list and market the home to the general market – normally through the Multiple Listing Service (MLS). Once a home is entered in the MLS, many real estate websites will pick-up and showcase those listings as well making a home visible to a very large number of potential buyers.
A pocket listing is very different. These listings are not technically “on the market”. They are not entered into the MLS, but marketed independently and directly by the seller’s agent or broker, who has complete control over the listing, thus keeping the listing in their “pocket.” Their advertising, if any, is normally very local in nature, and therefore the amount of exposure is limited.
Pocket listings are only permitted if the seller expressly agrees to it. Those that are pro-pocket listings argue that they enable privacy. Additionally, some sellers use them to “test the water” if they aren’t 100 percent serious about selling.
Some real estate professionals argue that pocket listings are harming the market by skewing the overall market image, limiting exposure, and making it harder to browse comparable homes and prices. Others are frustrated that pocket listings enable the listing agents to take in the full commission.
We don’t think pocket listings are in the best interest of a seller. There is the potential for a seller to receive less than market value if a deal is made since a listing agent may be interested in a higher commission rather than considering the best strategy for their clients.
A seller is better served if they expose their home to as many potential buyers as possible, thereby increasing the chances of receiving a top-dollar offer. Additionally, with all of the marketing tools available to real estate professionals, why not utilize them all to your advantage?!
Ron Kowalski is an Associate Broker/Partner with Ron & Susan Associates with Re/Max Gateway in Lorton, VA.