Q: I’ve heard the term “pocket listing” a lot lately. What does that mean exactly?
A: This can have a couple of different meanings. Sometimes a Realtor may have a signed listing agreement with a Seller, but the Seller is still working on some repairs to the home, or maybe the agent is waiting for professional photos to be taken, and does not want it entered into the MLS system for one reason or another just yet. This may be referred to as a pocket listing.
A “pocket” listing could one in which a Seller says to a Realtor “I’m not quite ready to list yet – maybe in the next year, but if you know of anyone who wants to see the property, we can work together and you can bring them by” with the promise to list with the agent when they are ready. Then the Realtor may tell someone about the listing outside of the MLS, be it to a friend of the seller, a buyer known by the listing agent, or a colleague of the listing agent, and the property could sell before it even goes live in the MLS system. This scenario happens frequently in my market.
Other times, a seller may have a need to sell their home privately, or they may not want the home placed in the MLS. This sometimes happens with high profile luxury properties. While putting a property in MLS helps to provide the very best exposure to the buyer market, they might ask that their agent refrain from listing the property on the MLS to keep news of the sale quiet. However, reducing the pool of potential buyers who see the property by not offering it in MLS could result in a lower listing price.
As a buyer, its important to work with an experienced buyer’s agent in your corner who is in touch with the local real estate community and may know of several pocket listings. In our office, we hold weekly office meetings with all agents and we discuss new listings, price reductions and buyer needs – as well as pocket listings. This is how we help one another out and if we have a listing that is going to be coming to the market soon and we announce it at the meeting, sometimes it sells before it can even go live because another one of our agents has the perfect buyer who gets to go and see it before it goes live. So tell your buyer’s agent what you are looking for so they can scout out that perfect pocket listing for you, too! Don’t have one? Call us!
It is important for Realtors to note that some MLS’s have rules about pocket listings and there may be signed agreements with the seller which must be executed to keep the property out of MLS.