A pocket listing is a real estate industry term referring to a property where a broker holds a signed listing agreement and doesn’t place the home on the multiple listing system or advertise it for a certain period of time. In some instances, the homeowners feel that they need more time to prepare their home for sale before placing it on the open market. On other occasions the Broker has convinced the homeowner that this approach is in their best interest.
Well Not Exactly
Some Brokers will offer a myriad of reasons as to why this is a beneficial option:
- They have a small circle of friends for whom they think your home will be perfect and you won’t be inconvenienced by ongoing showings.
- Real buyers recognize value without the necessity of marketing.
- You will hear real feedback from qualified buyers.
- You’ll receive valuable information without obligation – you can choose to sell, not to sell or to rent.
Beneficial To Whom?
After reading the list, my only question is, “Beneficial to Whom?” The Broker because they have secured a listing? Certainly not the homeowner. Below is my response to each of the bullet points above.
- Sale price = supply and demand…Period. An open market will bring more buyers and greater demand than the sphere of a single agent or Brokerage. Forty-six percent of buyers surveyed in 2012 said that they learned of the availability of the home that they purchased via the internet.
- What value is it to the homeowner to proceed without marketing? It may save the brokerage marketing dollars, but is that your concern when selling your home?
- This one is a “head scratcher.” Does this mean to imply that you won’t receive qualified buyers or real feedback if your home is placed on the multiple listing system? I sure hope not. It doesn’t say much about Realtors if it does.
- The last one makes no sense and is simply false. If you have signed an Exclusive Right To Sell listing agreement and an agent brings in a buyer that meets the terms stated in the contract, you are basically placing yourself in double jeopardy should you decide not to sell. The Broker who procured the buyer may be due a commission and the potential buyer may expect you to perform as well or face litigation.
That is, of course, unless there’s a clause in the contract stating otherwise and it’s made clear to the agent showing your home that this is so. Or it could be that the listing agent really doesn’t have a valid contract at all. That doesn’t bode well for them or you from the perspective of the competing brokerages in town.
You should ask yourself before signing this type of agreement if you really want to place yourself in such a precarious position with a potential buyer. Other than conditions which are unusual and salient to your specific situation, a pocket listing is seldom in your best interest.
Have you ever been disappointed in the selling price of your home?
Could it have been due to a lack of buyer showings?
