Pocket Listings

Pocket listings are a hot topic in today’s market. Instead of putting the house on the local multiple listing service, agents restrict access to information about the house to their own buyer clients or colleagues in the same brokerage, hoping for a quick, full-price sale. Sounds great, right?

The issue becomes one of ethics, for some agents – are they in the best interest of the agent or the seller? On one hand, if agents can sell their off-market listing to a buyer-client they bring in on their own, they can collect both sides of the commission rather than split it with another agent, or split the commission with an agent from their own brokerage; what often happens is agents reach out to their colleagues to see if they have any buyers who would be interested in their seller’s home.

Especially in cases where sellers need to move their property quickly, and there happen to be interested buyers available before the home is put on the MLS, this is an ideal situation. To some agents, the pocket listing provides sellers a pre-marketing service of their home, and a private one to interested buyers.

“Some real estate companies have a tremendous database of buyers who have clearly expressed interest in certain properties,” Sam Powell, an agent with Dream Town Realty, says. “So allowing them a kind of ‘sneak peek’ has been successful in driving traffic to a property before putting it onto the open market.”

In a market where inventory is short, having a way of sharing a listing with an exclusive group first is an effective tool in some market areas. Some sellers would love to sell their home quickly, and some agents would love to sell it without staging, holding any open houses and all the other burdensome parts that go with selling. “Is there a chance we are missing out on a pool of buyers who would be willing to get into a bidding war? Of course we are, but at the end of the day, educating the seller about their options and how they would like to proceed is the goal, in my opinion,” Powell says.

On the other hand, Teresa Stultz of Premier Living Properties in South Elgin believes there are few advantages to pocket listings. “I don’t think not showing the home to multiple buyers in this market is always in the best interest of the seller,” she says.

Stultz says she is seeing marketing times of three days or less for a property, and multiple offers that often go over the asking price on regular sales and foreclosures. Not exposing your clients’ home to the marketplace may limit some potential good offers, and there’s little advantage to the seller unless they want to show their home to only pre-qualified special buyers, she says. This can help weed out those people who won’t qualify for lending and save the seller from wasting valuable time.