What Are Pocket Listings?

 

As you take your dog for a walk on your morning stroll, you notice moving trucks in your neighbor’s driveway. A new family is moving in but you never even saw that home go on the market. You peruse Zillow at least once a day and would know if their house was listed. How did that happen under your nose? After introducing yourself and your pup to the neighbors, they tell you that they got the house through a pocket listing. What the heck is a pocket listing?

 

Pocket listings are listings that are not available to the general housing market and are never visible to the public. Pocket listings used to be more prevalent in luxury homes but with the seller’s market we are experiencing, it is becoming more common among all price ranges.

 

You see, real estate agents are a network of professionals who share knowledge with each other before sharing it with the rest of the world. If a real estate agent is about to list a home, they would first go to other agents to see if they have buyers looking for a home that meets the criteria. They would then offer it to them first before listing it to the public.

 

Why would they do this? Wouldn’t the homeowners want to give their house a fair shot on the market? There are several reasons. In this article, we break down the top reasons why a seller may go this route and how to win on these mysterious “pocket listings.”

 

 

By presenting a property that may not be completely ready to hit the market, real estate agents create buzz around it. It may need some last-minute touch-ups, staging, yard work, or something similar but by putting sneak peeks in other buyers’ agents’ eyes, they can get their buyers excited and possibly snatch it up before anyone else, avoiding the dreaded bidding war.

 

Why go through all the trouble of getting your home in perfect shape to sell when agents can offer the listing within their network first and perhaps strike a deal ahead of time? If the property checks all the boxes for a buyer, the seller and seller’s agent may not have to go through all the nuisances of fixing it up. The reality in a seller’s market is that we have been seeing properties get snatched up that are not in tip-top condition. We recently read an article about the “House From Hell” in Colorado Springs that was filled with graffiti, stains, odor, and bugs. The home received multiple over-asking offers within one day of it being offered to the general public. Buyers are desperate to be in a desirable area and are willing to put in the leg work to fix it up. Since there are more buyers than sellers, these buyers are willing to pay top dollar in even the oddest of circumstances.

 

If your pocket listing has a buyer interested, you may only have to deal with a few potential buyers walking through your home. This means you get to avoid stranger drive-bys, people touching your things, opening your cabinets, and using your toilet. With a pocket listing, you may only have to deal with a few strangers doing these things. You also won’t be getting that inconvenient call right in the middle of dinner to set up a showing for that same evening because the buyer is only in town for one day. With pocket listings, you are more in control of who stampedes through your home and you can protect your most valuable asset – your time.

 

 

Speaking of one of your most valuable assets – time, you may save lots of it by starting your listing off as a pocket listing. When having your agent first offer it within their network, you can see if you’re getting traction. The formula is pretty simple – if there’s a ton of interest immediately within the network, you may have priced it too low, if there’s some interest it may be priced accordingly, and if you hear crickets you may want to lower the price to avoid having it sit on the market for what seems like an eternity in today’s hot market.

 

Although pocket listings may seem like the perfect scenario, there are some regulations agents need to follow for the transaction to be fair to the rest of the public. The National Association of REALTORS® posted a “Clear Cooperation Policy” which requires properties to be listed on MLS within one business day after coming soon. By hiring a knowledgeable real estate agent, they can guide you through the process and hopefully get you the best pocket deal while still following protocols.

 

To navigate the market, it is important to have a real estate agent by your side. An agent who can create buzz is well connected and can price your home accordingly off the bat can save you time, convenience and put more dollars in your pocket as well as match your home with the perfect buyer.


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