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- What Are Netting Escrows & How Does It Work?: The Best Guide - January 2, 2024
- The Secret About Prescriptive Easement: Top Guide 1 Must Know - December 4, 2023
- About Home Equity Loans In Texas And How Can One Obtain It - November 27, 2023
About Pocket Listing
Generally, the properties that are being sold are listed on a Multiple Listing Service also known as MLS.
When a property is listed on MLS, the potential buyers and other realtors can view the information about the property and approach the real estate agent representing the property.
However, what if the seller does not want to market the sale of the property on MLS? In such a case, they can opt for pocket listing. In this post, we will learn what’s a pocket listing in detail.
What Is A Pocket Listing In Real Estate?
A pocket listing, also known as an off-market or off-MLS listing, is a property listing used to sell the property to potential buyers through a private channel other than the Multiple Listing Service (MLS).
Since these listings run through private marketing channels the properties sold in this type of listing stay in the real estate agent’s metaphorical “pocket.”
In this type of property listing, you won’t be finding any for sale sign, or see it listed on any online portals.
In addition, the real estate agent will also get on board by sharing the listing with a small number of clients or colleagues who represent that particular client.
There aren’t many pocket listings – they make up a single-digit percentage of property listings posted in the country.
How Does A Pocket Listing Work?
When you hire a real estate agent to list and sell a property, a contract is signed between you and the real estate agent and the agent’s company.
The property is usually listed on the Multiple Listing Service (MLS), a database of properties for sale that is used by all real estate agents and brokers.
This is done so that your real estate agent or broker can earn his or her commission by selling your property through coordination with other agents and brokers.
However, in pocket listings, you do not sign any contract with your agent, and your property will not be listed on MLS.
This type of listing is used by sellers with high-end or rare properties who only want serious and qualified buyers to show interest in buying their properties.
With the real estate agent’s connections, these buyers could be low in number but could get an exclusive listing for these properties.
In worst-case scenarios, the seller can use this type of listing to check if there are any potential buyers and what kind of offers they are getting from them.
If there are no offers or potential buyers during the exclusive listing, a seller can then decide to list the property on MLS.
It is important to note that some types of listings are not considered legitimate because one agent represents both the buyer and the seller.
Because of this, some types of listings are prohibited by the National Association of Realtors (NAR) or prohibited by state law.
When Should One Use A Pocket Listing?
Below are the situations when a seller might want to use an exclusive listing:
- Avoid the problem of bidding wars.
- Avoid sharing home price reduction figures in the MLS, which could alert home buyers.
- Sell to a known buyer so that the sale transaction could be quicker.
- Negotiate a discount with a real estate agent, who may not spend much time marketing your property.
- Check the home sales price and see if there are any potential buyers.
- Keep privacy of their home sale, especially if the buyer involved is a celebrity or public figure.
- Marketing to exclusive or restricted customers.
Finally, if the goal is to keep a listing private, avoid listing in the MLS, or limit it to a small number of potential buyers, a pocket listing may be a good option.
What Are The Pros And Cons Of Pocket Listing?
There are pros and cons for both the agent and the seller to offer the property as a bag list.
Pros:
- There is confidentiality for the seller and the buyer.
- The agent keeps 100% of the commission.
- A realtor can anticipate the asking price and set it accordingly before listing the property in the MLS.
Cons:
- A low number of potential buyers due to no public advertisement.
- If the deal falls through or a buyer is not found, the property has no market visibility.
- Only one agent is trying to sell the property.
- Low chances of multiple offers and bidding for the asking price.
Conclusion
Off-market listings or Off-MLS listings are essentially real estate marketed to potential buyers through private channels, as opposed to the Multiple Listing Service (MLS).
If the goal is to keep the property listing exclusive, avoid getting it in MLS, or limit it too confined buyers, this type of listing may be one of the best ways to opt for.
Understanding the working, advantages, and drawbacks of pocket listings may help you to make an informed decision.
