Pocket Listings (Seller Beware!)

As the sellers’ market continues and listings are hard to find, more and more agents are engaging in what is known as pocket listings.  Sometimes referred to as quiet listings, whisper listings, and by many other terms, a pocket listing is when a seller agrees to allow their agent to sell their house privately, without making it known to the general public via the Multiple Listing Service (MLS) or other listing services. Although not illegal in most states, the majority of real estate agents agree that pocket listings are not in your best interest.  Here’s why:

Homes that are pocket listed receive less exposure to potential buyers.  Due to the decreased exposure, a homeowner may be forced to sell their house at a price lower than they otherwise would due to lack of competitive offers. Offers may also have contingencies that otherwise may have not been requested if there was more competition for the home.

Seniors are often times pitched a pocket listing as a “no hassle sale.” Many seniors (many consumers in general) have accumulated a lot of “stuff” after 40+ years of living in the same home.  The opportunity of not downsizing or minimizing the exposure of a cluttered home to the general public can be appealing, however, it is important to understand the price for this convenience could be in the tens of thousands of dollars.

According to the National Association of Realtors AE Magazine, “When an agent recommends a pocket listing to a client, it is crucial that he or she thoroughly discuss with the seller the pros and cons of listing a property through the MLS… withholding a property from listing on the MLS significantly diminishes these marketing opportunities, which may result in reaching fewer potential buyers and a longer time from listing to selling the property, and, perhaps at the core of most sellers’ minds, it may not yield the highest price for the property.”[1] Less competition generally equals a lower sales amount.

Pocket listings may be appropriate if a seller if concerned about privacy. Some may also try a pocket listing for very short period of time and may be happy with offers received. In most cases, however, pocket listings will result in a lower sales price for your home.

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References:

[1] REALTOR® AE Magazine; March 5, 2014, Law & Policy: Professionalism and pocket listings By: Lesley M. Walker


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