What You Need to Know About Pocket Listings
Shhh… We want to tell you about an exclusive off-market “pocket listing” that hasn’t hit MLS yet. You could get an edge in the Bay Area’s crazy competitive housing market…
Intrigued? That’s the idea. Pocket listings create an air of secrecy and the cachet of exclusivity. The question is, is this truly the best way to buy or sell a home?
Bay Area real estate agents and sellers are increasingly using this quiet off-market listing strategy that was once the sole realm of the rich and famous who wanted to keep their real estate dealings private.
Why pocket listings grew in popularity
Pocket listings are reportedly at peak popularity because of historically low housing inventory and feverish buyer demand. Up to 30 percent of San Francisco agents’ luxury listings are now off-market listings, according to a recent San Francisco magazine report.
In a typical home sale, agents upload property details to the local Multiple Listing Service, or MLS, which is then distributed to popular public websites, including Redfin, Trulia, and Zillow. And there will be lawn signs, email blasts, flyers, and more.
But with a pocket listing, brokerages quietly share property information only with select agents and clients, discreet Facebook groups, on the Top Agents Network, and a growing number of exclusive portals like Pocket Listing Service and HomeQT.com.
Buyers like pocket listings because they get elite access to housing inventory without having to deal with competition from the hoards of eager buyers.
Sellers like pocket listings for the streamlined process, which usually nets them the asking price, at least.
Proponents say that a pocket listing also gives the seller and agent a chance to test the waters before cementing a price in the MLS. They can gauge interest in the property and adjust accordingly, without worrying about the infamous MLS “days on the market” clock. (The longer a home sits on MLS becoming “stale,” the more low-ball offers it might attract.)
Pocket listings aren’t for everyone
There are a few pros – and a lot of cons – for your average Bay Area home seller, according to Abio Properties co-founder and broker Cameron Platt.
Cameron says few sales actually warrant an off-market campaign. Unique sellers in this category could include celebrities, people with privacy issues, sellers who are dealing with extreme distress and don’t have time to market their home, and sellers who have a problem tenant.
Or maybe the sellers have a unicorn property like a $10 million estate that will attract only a certain breed of buyers. Sellers don’t want to advertise and host an open house that will attract more looky-loos than interested investors.
“I think there is a very specific time and a place for pocket listings,” adds Linnette Edwards, Abio co-founder and associate broker.
During the holiday season when the market is slow or during a market downshift, Linnette explains, “some agents might try a pocket listing first to generate a sense of demand and uniqueness.”
As for everyone else who is considering an off-market listing, forget it, Cameron says.
“The best way to ensure a seller obtains the best price possible for their property is to fully expose it to the market, which includes entering the property into the appropriate MLS,” Cameron emphasizes.
“The downfall of a pocket listing is a seller might be leaving money on the table, and that bugaboo is enough to convince most clients not to do it.”
Assoc. of Realtors frowns on pocket listings
It’s worth mentioning that the California Association of Realtors discourages pocket listings because they might lead to ethical, antitrust, and fair-housing issues.
A recent article in Realtor magazine notes that pocket listings disrupt the market by making housing shortages worse for consumers and their agents.
Yet the real estate industry continues to change rapidly as brokers test strategies to gain the competitive edge for their clients.
Only time will tell if pocket listings will become an industry standard or fade when (if) the Bay Area real estate market slows.
Did you have a pocket listing success or fail? Tell us your story! Or just contact us to learn more about off-market sales. Call Abio at 888-400-ABIO (2246) or email firstname.lastname@example.org.
P.S. Did you know there’s a movie called Pocket Listing? “Double crosses, adultery, murder, mistaken identity, and revenge…” Hmmm, sounds like a typical day for us. 😉