Are you planning on using a pocket listing to buy or sell your home? In this article, we’ll break down what a pocket listing is, how you can use pocket listings for off-market real estate transactions, and whether a pocket listing is the right choice for you.
Updated July 24th, 2019
Buying and selling property on the open market can be a stressful and time-consuming process; this is especially evident when dealing with high-value homes.
The good news is that, despite what you may have heard, buying or selling your home on the open market is not the only — or necessarily the best — option available to you. If you want a more private, more efficient, and potentially more valuable real estate transaction, consider buying or selling with a pocket listing.
If you want to know whether a pocket listing is the right listing option for your home sale or home purchase, we recommend that you reach out and discuss your concerns with a top agent in your local area.
In the meantime, read on to learn more about what a pocket listing is and whether it’s the right listing option for your home sale or home purchase.
What is a pocket listing?
In real estate, a pocket listing is shorthand for an exclusive off-market property listing. To understand what this means, let’s consider how an off-market listing differs from an open market listing.
In a conventional open market listing, the seller’s agent uploads their client’s home to the Multiple Listing Service (MLS), an official directory for property and land sales. Conversely, in a pocket listing, the seller’s agent will still create an official property listing, however, instead of being uploaded to an MLS, this listing is reviewed by the seller and marketed to a handpicked list of buyers and buyer’s agents.
Traditionally, off-market pocket listings were a rare occurrence, largely confined to high-value or celebrity real estate transactions. However, this is no longer the case, and withholding from the MLS has become an increasingly popular listing option for metropolitan sellers. In fact, 2018 brokerage estimates indicate that pocket listings in major metropolitan markets frequently make up a staggering 30% of annual property sales.
Remember, a pocket listing can also be referred to as a quiet listing, whisper listing, or exclusive listing.
Are pocket listings legal?
Yes, even though an off-market listing can appear clandestine or sketchy, there’s nothing illegal about selling your home through a pocket listing.
However, if you sell your home as a pocket listing, it’s especially important that your agent is meeting their legal and ethical obligations to promote and protect your interests as a property seller. In order to abide by these obligations, your agent is duty-bound to inform you that open market listings usually generate more exposure and buyer competition than off-market listings.
How to Find Pocket Listings
Knowing how to find pocket listings is about who you know. To buy or sell your home with an off-market listing, you need an agent with a good reputation and an extensive professional network.
As off-market listings become increasingly popular amongst buyers and sellers, more and more real estate companies have started offering pocket listing services, including Top Agent Network, Zenlist, and offMLS. One of the newest and most successful companies to enter the off-market listing industry is the Pocket Listing Service.
The Pocket Listing Service
Established in 2017 by four high-profile Los Angeles realtors, the Pocket Listing Service is a private listing platform that allows agents to share, compare, and filter pocket listings in their local area. To preserve the exclusivity of the platform, the Pocket Listing Service can only be accessed by verified real estate agents. Home listings on the Pocket Listing Service aren’t restricted to an upper or lower price limit and agents are free to disclose as much or as little information about their client’s property.
The Pocket Listing Service was launched to give agents a more convenient way to advertise and access off-market listings on a consolidated online database. So far, the Pocket Listing Service has been particularly useful for sellers looking to test their home’s price point. Depending on market interest and agent feedback, sellers may then decide to re-list their home on the MLS.
Pros and Cons of Pocket Listings
To better understand the utility and rising popularity of off-market listings, we’ve broken down the respective pros and cons of pocket listings from the perspective of both home sellers and home buyers.
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Why do sellers use pocket listings?
To test the market: If you haven’t fully decided on selling your home, agents can use an off-market listing to pre-market your property to a wide pool of potential buyers.
To streamline the selling process: By selling through a pocket listing, homeowners can direct the bulk of their marketing efforts towards high-net-worth buyers or investors. This not only results in a more efficient selling process, it also saves you, the homeowner, from responding and negotiating with low-ball offers from less affluent buyers.
To maintain their privacy: By selling on an off-market listing, homeowners can both avoid the hassle of open house showings and minimize unwelcome attention from the public. For this reason, off-market listings are the preferred choice for sellers who wish to maintain their privacy, such as celebrities or high-net-worth individuals.
- A pocket listing gives sellers a way to preserve their personal and home privacy.
- By avoiding the MLS and selling through a pocket listing, your home won’t start the dreaded “days on the market timer.”
- Sellers can use a pocket listing to gauge general market interest on their home.
- Sometimes, selling through a pocket listing can result in a faster, more efficient home sale.
- Pocket listings often receive less attention when the market is slow, especially if your agent can only reach out to a limited network of private buyers.
- Pocket listings generally receive less market exposure, reducing buyer competition and potentially impacting your final sale outcome.
Why do buyers use pocket listings?
To access a less competitive market: Because off-market listings are only advertised to a select few buyers, there’s less of a chance that a pocket listing will attract showing competition or bidding wars.
To enter into a more flexible home buying process: When a seller is willing to list their home off the market, there’s a good chance they’ll be more flexible with other buyer requirements, including move-out dates, furniture trading, and closing costs.
To buy real estate under market value: In a cooling market, pocket listings can take time to generate buyer interest. If there’s a homeowner who’s eager to sell anyway, you might be able to purchase a home under its open market value.
- Pocket listings provide buyers with real estate opportunities that aren’t available on the open market.
- There is significantly less buyer competition for properties sold on pocket listings.
- In some cases, buying through a pocket listing can result in a faster, more efficient home purchase.
- Even though there is less overall competition for pocket listings, off-market sales typically attract a greater percentage of high-end property buyers and investors.
- Buyers generally find that sellers who list their home on a pocket listing are less flexible during price negotiation.
- Although pocket listings are absolutely legal, some buyers may have ideological or ethical issues with the exclusivity of off-market listings.
Does a pocket listing make sense for my home sale?
If you’re still confused about pocket listings or want to know more about buying or selling a home on an off-market listing, it might be time to address your concerns with a professional. A good real estate agent will not only guide you through the various pros and cons of pocket listings, they’ll also advise you on open market listing alternatives, historic off-market listing sales data, and local demand for off-market properties.
To connect with a top-rated, experienced real estate agent in your local area, get in touch with Clever! The Clever Partner Network is made up of over 3,000 agents drawn from both national real estate companies and major regional brokerages (e.g. Century 21, RE/MAX, Keller Williams). Whether you’re a home buyer or home seller, when you partner with Clever, you’ll be able to take advantage of full-service agent support, competitive listing rates, and exclusive cost-saving opportunities.
Top FAQs About Pocket Listings
Can you sell your house without putting it on the market?
Yes, there are several options available to homeowners looking to sell their property without publicly advertising it through a realtor or listing it on an MLS. In real estate, selling a home without putting it on the market is typically referred to as a “pocket listing.”
What is an off-market listing?
An off-market pocket listing is a type of property listing that is not visible or marketed to the vast majority of home buyers. Off-market listings are particularly popular amongst very wealthy homeowners and celebrities, most of whom prefer the privacy and exclusivity of an off-market sale.
How do I share my pocket listing?
The most effective way to share your pocket listing is to partner with an experienced, local real estate agent. A well-connected agent can stealthily reach out and market your pocket listing to a wide network of professional buyer’s agents, high-profile property investors, and reliable local home buyers.
What is a private listing?
Although the terms “private listing” and “pocket listing” are often used interchangeably, the former has its own distinct definition. In commercial real estate, a private listing is a type of off-market listing that allows you to sell your business without publicly disclosing its store name, location, or earning potential. Like a pocket listing, private listings are only announced and marketed to a select group of commercial buyers and buyer’s agents.
Do I need a lawyer to sell my house privately?
Well, not necessarily. As real estate contract legislation varies state by state, the answer to this question will likely depend on your current residency status. At this point in time, 23 U.S. states uphold a legal requirement for home sellers to hire a real estate attorney for final contract negotiation and settlement.
Even if you’re living in a state where property lawyers aren’t legally required, there are still many good reasons to hire a real estate attorney. Legal advice from a real estate attorney is especially valuable when selling your home on a private off-market listing, where drafting and reviewing complex contingencies or contractual adjustments is a more frequent occurrence.
Do real estate agents have access to more listings?
Yes, besides pocket listings, real estate agents can access MLS listings, net listings, exclusive right to sell listings, and exclusive agency listings. An experienced, well-connected agent can also guide buyers and sellers through the ins and outs of a wide range of non-conventional property listings, such as estate sales, FSBO listings, homes with active liens, and homes in foreclosure.