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What Is a Pocket Listing? A Sneaky Way to Sell Your Home

What is a pocket listing?

atakan/istock

When the time comes to sell a home, most people contact a real estate agent and get their place listed online on sites like realtor.com®—which will hopefully bring droves of interested buyers to their door. Yet there is another way, and it’s called a pocket listing. So what is this type of listing, anyway?

This is a property that is technically for sale, but agents won’t find it listed on the multiple listing service, the database they use to peruse local options for clients. Likewise, home buyers won’t find pocket listings online or by a “For Sale” sign in the front yard, either. Instead, the real estate agent who’s been hired for a pocket listing keeps it in his metaphorical pocket (along with photos possibly) and shares it only with a smattering of agents he knows and trusts can turn him on to the right clientele.

Pocket listings constitute only a slim percentage of total listings, by most estimates under 10% of the national total. Why would anyone choose this hush-hush approach? Here’s why it appeals to certain sellers, and how to decide if it’s right for you.

The benefits of pocket listings

Certain homeowners prefer selling their home as a pocket listing for a variety of reasons:

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  • To maintain privacy: First and foremost, “Some people don’t want the general public to know they’re selling, or don’t want to have pictures of the insides of their homes all over the internet—especially celebrities,” explains Realtor® Nathaniel Pitchon Getzels of Berkshire Hathaway HomeServices in Los Angeles. These sellers also get to sidestep having a bunch of random looky-loos traipsing through their house just to ogle how the richer half lives; all those who come to see the home are pre-qualified and have been vetted as serious buyers.

  • To test the market: You can get an idea of what interested buyers are willing to pay for your home before you make the listing public on the MLS. That way, you may be less likely to have to reduce the price if and when you finally do post your property on the MLS (more on why that’s bad next).

  • To spend less time on the MLS: People start to wonder what’s wrong with a property if it’s been on the MLS for weeks and hasn’t sold. “Listing a property privately is an attractive option to avoid the gaze of the public eye and to protect the property from the stigma that can develop if it remains on MLS longer than the market average,” says U.S. News & World Report real estate columnist Devon Thorsby.

  • To give them the push they need to sell: Some people don’t want to list their homes, but would consider selling if they could fetch a certain price. A pocket listing would give a Realtor the leeway to find a motivated buyer who is looking for that exact type of property. In essence it could be a very easy transaction without any marketing expense or the hassle of showings.

  • For a reduced commission: Most Realtors charge a flat 6% of the home’s sale price for commission, but a shrewd negotiator could knock that down a point or two because the Realtor doesn’t have to invest a ton of money or time marketing the property.

 

The downsides of pocket listings

While pocket listings have privacy going for them, this secrecy does come with some obvious drawbacks:

  • Limited exposure: A property listed on the MLS has the potential to be seen by millions of people, which means odds are good you’ll find a buyer fast.

  • Lack of walk-in traffic: Sure, many people shop homes online, but it’s also common for people to cruise neighborhoods they like to see if any “For Sale” signs are up. Also, neighbors might be looking for a nearby home for friends and family.

  • A lower price: You’ll never know what price the market will bear if you never actually put your home on the market. Less interested home seekers means fewer, and possibly lower, bids.

 

Due to these downsides, most real estate experts agree that the majority of home sellers are best served listing their home the traditional way on the MLS.

“Getting the maximum exposure for your home from an MLS listing is essential to achieving top dollar on your sale,” says Sam DeBord, managing broker of Seattle Homes Group with Coldwell Banker Danforth. “While there are some rare situations where home sellers are more concerned about keeping their sale quiet than what price they can get for their home, the vast majority of homeowners are best served by an MLS-listed property.”

Still, though, home sellers should know that pocket listings aren’t just for the rich and famous, but have benefits for regular home seller, too. So be sure to weigh the pros and cons of both approaches before you start spreading the word.

The post What Is a Pocket Listing? A Sneaky Way to Sell Your Home appeared first on Real Estate News & Advice | realtor.com®.