RENT OWN SELL
Newyork
RENT OWN SELL
Newyork
Curious about how some luxury homes or celebrity estates seem to vanish without ever hitting the market? Those might be pocket listings, a discreet way to sell property. But is this method right for you? In this guide, we will learn about pocket listing meaning, how to find pocket listings, and more.
A pocket listing, also known as hip pocket listing in the US and exclusive listing in Canada, is a real estate property that is kept off the main listing service (MLS) and marketed through private channels, like word-of-mouth or exclusive buyer networks.
This means the property isn’t advertised to the public and could limit the number of potential buyers who see it. Sellers might choose a pocket listing for privacy or to test the market before going fully public.
A pocket listing is a property sale that occurs privately, without being advertised publicly. The seller opts to keep their property off conventional real estate platforms, such as the Multiple Listing Service (MLS) database, maintaining discretion about its availability.
In a pocket listing, the information about the property’s sale is restricted to a limited group, often agents within the same brokerage or a private network. This approach grants the seller privacy and control over who is informed about the property being on the market.
Typically, pocket listings are handled by a single agent who is not bound by the rules of the National Association of REALTORS® (NAR). Consequently, they are not obligated to follow the organization’s regulations, including those prohibiting pocket listings.
Since there is no formal agreement to involve other real estate professionals, the agent managing the pocket listing may potentially retain the entire commission. This strategy suits sellers who prioritize privacy and wish to avoid the conventional listing process’s potential inconveniences.
Pocket listings haven’t been completely banned in the United States. However, the National Association of Realtors (NAR), a prominent real estate professionals’ organization, implemented the Clear Cooperation Policy in May 2020, significantly limiting them.
This policy mandates that listings must be submitted to the Multiple Listing Service (MLS) within one business day of being publicly marketed. As the MLS is the primary platform where properties are shared among realtors, this rule effectively curtails pocket listings.
It’s worth noting that exceptions to this policy may exist, and some states could have their own regulations regarding pocket listings. Nevertheless, the Clear Cooperation Policy has effectively limited their prevalence nationwide.
Imagine a local architect has designed a one-of-a-kind modern house on a secluded hillside. They want to sell the property but value their privacy and prefer a buyer who appreciates the unique design.
Instead of a traditional MLS listing, they decide to work with a real estate agent known for their connections with high-end buyers and architects. The agent keeps the listing quiet but reaches out to a few potential buyers:
Through these targeted efforts, the agent finds a qualified buyer who loves the house and is willing to pay a premium price. The seller achieves their goal of a private sale with a serious buyer, while the agent leverages their network for a successful transaction.
MLS listings and pocket listings offer contrasting approaches to selling a property. MLS listings, used by nearly 600 MLS systems across the US and encompassing 80% of homes sold nationwide, provide maximum exposure. They reach a wide pool of buyers through real estate agents and public advertising, potentially leading to a higher selling price through bidding wars and attracting walk-in traffic. However, they lack privacy and the seller gets less control over the marketing process.
Conversely, pocket listings are private and target specific buyers through an agent’s network. This can be ideal for unique properties or privacy-conscious sellers, but it limits exposure and the potential for a bidding war, potentially leading to a lower selling price.
Pocket listings themselves aren’t illegal in the United States. However, their prevalence has been curbed. As previously mentioned, the National Association of Realtors (NAR) mandates members to list properties on the MLS within one day of public marketing. This effectively limits pocket listings for realtors, who comprise a significant portion of real estate agents.
Finding off-market properties can be tricky, as they are intentionally kept out of public view. Here are some strategies to potentially gain access to these elusive pocket listings:
Work with a Real Estate Agent: An experienced agent with an extensive network may have inside knowledge of properties not widely advertised. They can keep an ear out for off-market properties that might be a good fit for you.
Consider an Agent Not Affiliated with the National Association of Realtors (NAR): These independent agents might be more open to facilitating pocket listings. However, exercise due diligence in selecting a reputable, licensed professional. It’s crucial to note that regulations surrounding pocket listings vary across states, with some imposing stricter guidelines regarding such practices.
Whether you’re a seller seeking privacy or a buyer on the hunt for a unique property, a pocket listing might seem like an intriguing option. However, as we’ve explored, there are significant advantages and limitations to consider.
For the ideal seller and buyer in specific circumstances, a pocket listing with a trusted real estate agent can be a successful strategy. That said, for most homeowners, the broad exposure and potential bidding wars of a public MLS listing will likely yield the best results.
