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The use of pocket listing websites in real estate

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Pocket listings. The mere mention of them sets some real estate agents aflame, either defending or decrying their merit.

One side argues pocket listings are a blatant disservice to sellers, robbing them of full market exposure. Allegedly, pocket listings insulate a property from being subjected to outside forces, which cuts out healthy competition on the open market and can make a seller lose out on a potentially higher sales price. Some brokerages even have sellers agree to a delayed MLS posting, so that they can market the listing internally and procure their own buyers before it hits the public. They are perceived as nothing but a surreptitious tool to double end a deal & benefit no one but the agent.

The other side claims pocket listings were the method of choice in selling homes well before the concept of co-op’ing agents became mainstream. In fact, in many cities and foreign countries, pockets listings are how homes are still exclusively sold. If you have a buyer who wants to put an offer on a house that is listed by another agent. You are out of luck. That buyer must go through that listing agent to purchase that property.

The case for and against

Advocates of pocket listings also say this type of transaction protects the seller’s need for privacy. It’s true some people do not want others to know their house is on the market… This privacy argument doesn’t really hold water, unless you are a notorious celebrity. Even Candy Spelling, after trying to quietly unload her $150,000,000 56,500 square foot compound for years as a non-MLS listing, finally relented and listed it on the MLS this summer. (Although if you ask me, sellers who don’t want anyone to know their house is for sale probably isn’t very motivated to begin with.)

Whether these accusations leveled against pocket listings is true or not, I have in the past found myself slightly uneasy with the business practice of pocket listings and the agents who champion them. My main gripe is that it blunts the co-operative spirit of the agent community. When I hear the term pocket listing, I think “restricted access.”

A culture of transparency

I’m on the outside looking in….again. (flashback: a four-eyed flat chested nerd named Herman overhears the popular kids brag about their upcoming house party. They glance my way and say “No nerds allowed!”)

With the advent of technology, internet, and especially social media, the world is moving towards an open atmosphere where people expect the flow of information to be unfettered. This is function of a larger societal trend. The public increasingly expects, and will soon demand, a culture of transparency. Pocket listings strike me as secretive and anachronistic.

Furthermore, I just can’t help but feel the success of a pocket listing is limited by the listing agent‘s sphere. I mean, how many people can one agent possibly know? Compared to the thousands of eyeballs on the MLS? If I were a seller and an agent wanted to list my house as a pocket listing, my reaction would be “Just because you can bring me an offer from your own buyer, doesn’t mean that there aren’t even better offers out there for me.”

In the know

Now having said all that from the pulpit, I must disclose that I just got a tip from a real estate agent this weekend. Her client wants to discretely sell her property that my buyers have been coveting for years! (All over sudden, this outcast nerd is in the know, part of the in-crowd, invited into the inner circle! Oh joy!). Do I get off my high horse and arrange a showing for this non-MLS listing? Or do I succumb to my principles and let it slip through my fingers?

Hmmm, it‘s like junior high. When you’re not invited, you say those cool house parties are just for stuck up elitist snobs. But when they do throw you a bone and invite you, you ditch your geek friends in chess club and immediately beg your parents for a curfew extension. Yes, I suppose I have a love/hate relationship with pocket listings.

One case:

Oh while we are on the topic of pocketlistings, there has been some fanfare about a new website called pocketlistings.net launched earlier this year by a San Francisco agent and fairly successful blogger (thefrontsteps.com).

Dubbed as “The Off Market Real Estate Network,” some self-ascribed benefits to posting on pocketlistings.net include:

1. No Days on Market
2 . No Public price reductions
3. No publicized commission agreement
4. No definitive price, only price ranges
5. A place to “list” your home prior to MLS, or a place to list it if it is unsuccessful selling on MLS

I’m not sure what to make of this site yet. But is it me, or do these “benefits” resemble another little known San Francisco based website? Craigslist. (Goodness gracious, one dose of popularity and this nerd has become snarkier than the head cheerleader at the Sadie Hawkin‘s Dance!)

Watch Real Estate Expert Herman Chan put the REAL back in REALTY. In his show Habitat for Hermanity, Herman skewers the real estate business and pokes fun at his fellow agents, all the while empowering buyers & sellers with behind-the-scene tips & secrets of the industry! Get a glimpse beyond the glitz & glam of real estate. It's a hot mess! Featured on HGTV, House Hunters & other media outlets, Herman is the undisputed Real Estate Maven whose helpful & hilarious commentary you just can't live without! In fact, his real estate TV show has just been optioned in Hollywood!

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14 Comments

14 Comments

  1. James Malanowski

    September 20, 2010 at 3:52 pm

    I know this will piss off some folks, but the broker’s job is to sell the property, not to make sure another agent gets paid. The MLS is a tool and if you can do your job and get the property sold without that tool than more power to you. Most of my listings get sold because of the internet exposure I give them and the network of agents I prefer to deal with, not the MLS.

    Personally, I would much rather deal with agents that I know can get the job done with minimal hassle so therefore, my common practice is to premarket listings before they are officially “on the market” so I can stir up some interest and have some buyers in line beforehand.

    I don’t want to hear anything about ethics or fairness. I would challenge you to show me anything that makes that illegal or unethical. My job is to get the property sold and that’s what I do. Every time. Usually faster than my competition. I work for the seller, not a competing brokerage. My fees are mine unless I absolutely have to pay another broker to bring in a buyer.

    • Herman Chan

      September 21, 2010 at 12:42 am

      I agree it is our jobs to sell a clients property. However, getting it sold is just the starting point. the fudicary duty we owe is to get the highest and best offer for them….and that may not always be our own client. I’m just saying…

      But as vicki voiced below, if the seller is ok with that arrangement , then so be it. We’ve done our job.

      • Tony

        April 20, 2016 at 6:48 pm

        What?
        “….the fudicary duty we owe is to get the highest and best offer for them….and that may not always be our own client…”
        First: If the seller is NOT my client my “FIDUCIARY” duty to my client, in this case, is for the Buyer only.
        Second: Hence, my duty Is to get the property for my client, for the lowest price possible…

        In some cases the seller do not want to advertise the facts that their house is for sale for any of a million reason. My job , after telling them the cons and pros, is to protect that privacy and their desires.
        Tony

  2. Ruthmarie Hicks

    September 20, 2010 at 4:26 pm

    HOOOOO BOOOY!!!! Where does one begin…

    1. The Case Against:
    Unless the property is VERY unique or the agent VERY unique (I mean bordering on the ridiculous) nothing can really beat MLS exposure. I sell – because of my web presence – roughly 1 in 10 of my own listings… NOT scientific because I haven’t been an agent long enough to conclude that this is a trend. My marketing definitely does do the job in this case.

    BUT – there are 7000 agents in our area. I am among the more productive of these – but there is no way on earth that I can say that “I, Ruthmarie Garcia Hicks, have a bigger net than the other 6999 agents put together.” Anyone saying something like that is an idiot for even trying to justify it. I don’t care what you do – there is not a snowball’s chance in hell that this is the case.

    2. Transparency???

    We have more information – more “stuff” on the web now. But I don’t think this makes us transparent. The information has been twisted into “SPIN” and everyone’s got their angle. Look at lead aggregators and sites where you can buy your way onto a web page that makes it look as if you are the listing agent. Success in this world has more to do with your ability break out the plastic than your overall ability to sell real estate – or anything else for that matter. People are more confused then ever and their decisions are being guided more by hype than by facts. I do not call this transparency.

    3. In the Know:

    I don’t see the conflict for you. Seriously, I don’t – and true confessions here – I too was the nerd that was never looked on as “cool.” Heck – I even hold a doctorate – so the whole world KNOWS I’m a nerd. (If you can’t beat it – own it – but that’s another story)

    Point here is that your obligation is to your client. If you can secure the property that they want – then that’s what you should do. The Listing Agent is another story. But by representing your client you are doing your job.

    4. One Case:

    1. No Days on Market – and no real exposure to the full buying pool – in a declining market? Not a good idea.

    2 . No Public price reductions – but by stifling the buyer pool you have the probability of building in bigger reductions – private though they may be.

    3. No publicized commission agreement – So what? That could work for or against you when an agent shows up. If the buyer pays – they will expect the commission to worked into the pricing. I see no benefit here.

    4. No definitive price, only price ranges – It all comes down to what the market and the banks will let you sell it for. Putting up vague price ranges is smoke and mirrors.

    5. A place to “list” your home prior to MLS, or a place to list it if it is unsuccessful selling on MLS – and allow the price to decline further while playing games with the listing.

    The prosecution rests…..

    • Herman Chan

      September 21, 2010 at 12:49 am

      Very well argued! You got me convinced. NERDS UNITE!

  3. Vicki Lloyd

    September 20, 2010 at 5:45 pm

    I’ve seen pocket listings sell for more than expected, as well as less. Sometimes, the “I’m the first to know” buyer will over-pay because they don’t want to take a chance that another buyer will out bid them. I’ve also seen them “given away” because a seller just wanted to get it over with, and the listing agent knew that and took advantage by either selling it himself, or bringing in one of his friends.

    Limited marketing will always leave some doubt about the true value. If the seller is willing to live with the doubt, that is his choice, but he should be informed!

    • Herman Chan

      September 21, 2010 at 12:01 am

      very well put vicky! you are right, ultimately if the seller is ok with it, then so be it. but it is their choice.

  4. stephanie crawford

    September 20, 2010 at 7:01 pm

    In my market I’ve never seen anyone with a real pocket listing. Occasionally I’ll tell other agents that I have “a pocket listing in this or that neighborhood.” What I mean is that I have a hot listing that will hit the market as soon as the repairs, my photos, paperwork, are complete. I think this is what most agents mean by pocket listing now-a-days.

    What I do sometimes see is an agent who will enter one or zero photos in the MLS in an attempt to secure both sides of the deal.

    • Herman Chan

      September 21, 2010 at 12:39 am

      hi stephanie! u r right, the meaning of the term pocket listing has evolved.

      i think that this is a good time to point out that picket listings probably happen more than we realize. i mean that is part of the allure, it’s not publicized, so how would we know any different unless it was on our radar.

      for example in my market, when a deal closes a listing agent must post who the buyer agent is. increasingly, I’m seeing ppl marking the buyers agent as “non area member” or some other vague designation. Of course it can happen that an out of town agent writes on a house, but I became very suspicious one time. An REO house hit the market my clients loved! We wrote an all CASH over asking offer, short fast close, practically no contingencies. I never got a written response/confirmation the listing agent received the offer after several emails. and it was not until I tracked him down on a phone (via a # blocked) that he finally mumbled that he got it. Anyways, I saw on the MLS it went pending in a couple days w/ another offer. But the escrow period was almost 2 months and the it was marked “non area member” on MLS , so I knew something was fishy.

      After it closed, I saw the new owners in the driveway, and it turned out they were represented by the listing agent (that’s why he marked it as “non area member” on MLS so no one would know) and I also found out they were not all cash at all AND sales price was lower than our. I seriously doubt this listing agent even forwarded my offer to the bank. Ugh.

  5. BawldGuy

    September 21, 2010 at 3:00 pm

    Taking a so-called pocket listing, regardless of definition, is not a moral issue any more than double ending. It’s PC at its best, or more honestly put, worst. Same with transparency, with precious few exceptions. All false issues from where I stand. They’re used primarily as marketing ploys, and secondarily as weapons to control others.

    Sellers, again with hen’s teeth exceptions, know exactly what they’re doing when they insist on this approach. It almost always begins with, “Bring me a buyer and I’ll pay you X% commission.” Fair enough. I’m not your mother. I told you the pros/cons. You’re an adult.

    They’re no different than other sellers in that they want results. Sure, most times it’s better using a traditional approach — they may or may not believe this, regardless of what we advise. As long as they’re not woefully undervaluing the property, it’s their choice. I almost always tell clients they can opt for something less than ideal, and I’ll only refuse to execute it if it’ll cause them damage. If they still want to do it, I make it clear I’ll not be assisting them in its execution. That almost always causes them to pause and reflect.

    Bottom line? Most of this is a non-issue, and PC based.

    What I wanna know, is what do you guys think of the designated hitter rule? 🙂

  6. Homes In Pasadena

    October 6, 2010 at 9:18 am

    Excellent article! You can really make several points for both sides. I believe that it is our duty to negotiate the best deal for our sellers – sometimes that might not be the highest price.

    If I can sell a house by word of mouth great. However, casting the widest net possible will most likely bring the best options for my sellers.

    Part of my job is to make sure my clients understand the process and their options. Every client’s situation is different and what might be acceptable for one might not be for the other.

    Bottom line, if I look out for my client’s best interest, I’ll sleep well.

    Thanks for the food for thought – Steven

  7. Alex Clark

    April 11, 2011 at 10:29 pm

    Herman,

    Great article, and you make great points. I think it is fair to point out that since launching we are now in 34 States, have almost 1000 members, and have close to 500 posts. We’ve been live for 9 months, do not do any marketing at this point, and what you see is a very bare bones beta version. We’ve had TONS of feedback, and our next version is coming soon. If agents aren’t joining, they’re going to miss out on opportunities for their sellers and buyers (you failed to mention you can post “buyer needs” on our site).

    What I read in these comments and what I read and hear everywhere is the same, “Don’t pocket list, because you don’t get exposure for your clients”. That’s old school thinking. We’re not only going to change that argument, but we’re also going to change the way agents think about “listing”. Listings are not about agents, they’re about sellers and selling their homes at a highest and best price that is acceptable to them. That’s what we’re going to help you do.

    As far as transparency goes, our site is public. Anybody can browse it.

    If anyone has any questions, feel free to contact me directly aclark at pocketlistings dot net.

  8. Herman Chan

    April 12, 2011 at 12:49 am

    hi alex
    took ya about 6 months but thanks for joining our little conversation here! 🙂

    i think it would really help your site if you had some success stories. i mean 1000 members doesnt say much. it’s like 1000 who signed up for a facebook fanpage. ppl sign up for anything nowadays.

    as for transparency, there are not addresses. and to get more details you have to pay for info. isn’t that veering towards what an MLS board does already?

    looking forward to the new version of the site!

    H

    • Alex Clark

      April 13, 2011 at 11:05 am

      Herman,
      Been a bit busy keeping track of the articles. 😉

      You make good points and as agents share success stories, we will share them. https://blog.pocketlistings.net/2010/09/20/the-first-success-story-is-confirmed-in-san-francisco-on-pocketlistings-net/

      We put all marketing on hold until this next version is done.

      On transparency, we leave it up to the agent to share what they want to share. Our current version doesn't allow addresses to display, or contact info, or photos. All of which is changing. We took the feedback from our users, and will again leave it up to the agent to decide how much or little information they'd like to share, including contact info, photos,and webpages.

      The fact is, just like your article states, whether you love or hate pocket listings, they exist and are an integral part of our industry. I can bet that every single agent out there won't hesitate to do a deal if their client contacts them and says, "Hey, I found this house on PocketListings.net, I'd like to write an offer on it."

      We're just streamlining and consolidating something that already exists and will continue to exist and thrive in our industry.

      I'm looking forward to the new version too!

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Opinion Editorials

The offensive myth of getting laid off being a blessing

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There’s an age-old trend in news to look for rags-to-riches stories. People love to hear about someone who’s down on their luck scraping together a genius idea and, through sheer grit (it seems), finding the motivation to finally strike out on their own and realize their dream.

Stop me if you’ve heard this one: Person X is laid off from their long-time but unfulfilling office job, say at an oil company in Alberta, or a marketing agency where their good ideas are consistently shot down.

What seems like a situation to for despair is actually an opportunity in disguise— see, with their newfound freedom Person X has the ability to fully commit to their small business pipe dream.

In fact, the story goes, getting laid off was actually the best thing to ever happen to this person.

This story is a myth.

Although I don’t want to discredit anybody who has had the willpower, luck, and resources to succeed at launching their business, there are many people who are laid off who are truly in critically terrible times.

The insidious underlying message of this myth is that anybody who is truly devastated by being laid off is being weak or lazy.

It serves to alleviate the guilt of those who may have survived the lay off themselves; it helps organizations justify the fact that they might have had to let an otherwise good employee go for their own, corporate-level problems.

The characteristics that many of these laid-off-turned-successful-entrepreneurs have in common are the same sort of privileges that many take for granted – health, youth, a personal support system to help keep the lights on, and an established network of people that can be turned into a market of clients.

What happens to the many workers who are victims of ageism when they are laid off in favor of younger, less expensive workers?

What happens if you’re laid off and you can’t use your newfound time to work on your business plan because you’re raising young children?

The entrepreneurs who find opportunity in being suddenly jobless were probably already on their way to striking out on their own, with their being laid off acting as the defined starting point for a plan they might not have known was forming in their heads.

If you, a friend, or a colleague have the unfortunate luck to be laid off, don’t let this myth get under your skin.

It’s okay to have a rough time with a huge life event that is absolutely terrifying and difficult.

Hang in there.

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Opinion Editorials

3 things to do if you *really* want to be an ally to women in tech

(EDITORIAL) Diversity is known to strengthen the overall performance of a company and its teams, and there are a number of ways you can be an ally to the talented women already on your workforce.

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More and more women are leaving their positions with tech companies, citing lack of opportunity for advancement, wage gaps and even hostile working conditions as some of the reasons why.

What’s better for the tech industry and its employees than cultivating inclusive and diverse departments? Diversity is known to strengthen the overall performance of a company and its teams, and there are a number of ways you can be an ally to the talented women already on your workforce. To name a few:

1. Be open to listening to different perspectives.

It can be awkward to hear so many reports of workplace politics stacking against women, especially if you’re not a woman!

Instead of getting uncomfortable or defensive – ask open ended questions and be interested in a perspective that isn’t yours and may be unfamiliar.

Don’t seek to rationalize or explain the experiences you’re hearing about, as that can come off as condescending. It’s common for women to be interrupted or spoken over in team gatherings. If you notice this happening, bring the conversation back to where the interruption began. Offering your ear and counting yourself as responsible for making space will improve the overall quality of communication in your company.

Listening to and validating what women have to say about the quality of their employment with a company is an important step in the right direction.

Expressing something as simple as “I was interested in what you had to say – could you elaborate on your thought?” can help.

2. Develop an Employee Resource Group (ERG) program.

An ERG is a volunteer-based, employee-led group that acts as a resource for a particular group of employees. An ERG can help to foster inclusiveness through discussion, team-building activities and events. It’s common for a department to have only one or two women on the roster.

This can mean that the day to day feels disconnected from concerns commonly shared by women. disjointed it might feel to be on a high performing team, without access to relatable conversations.

3. Be responsible for your company’s culture.

Chances are, your company already has some amazing cultural values in place. That said, how often are you checking your own performance and your co-workers performances against those high standards? Strong company culture and values sound great, but whether or not they’re adhered to can make or break the mood of a work environment.

Many women say they’ve experienced extremely damaging and toxic cultural environments, which lead to hostility, frustration, and even harassment. Take action when you see the new woman uncomfortable with being hit on at team drinks.

Call out those who make unfriendly and uncouth comments about how women perform, look, or behave.

Setting a personal threshold for these kinds of microaggressions can help you lead by example, and will help build a trustworthy allyship.

(This article was first published here in November, 2016.)

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Opinion Editorials

How the Bullet Journal method has been hijacked and twisted

(EDITORIAL) I’m a big fan of the Bullet Journal method, but sticker-loving tweens have hijacked the movement. Worry not, I’m still using black and white bullet points with work tasks (not “pet cat,” or “smile more”).

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It’s taken me some time to come around to the Bullet Journal method, because it took me some time to fully understand it (I have a tendency to overthink simplicity). Now that I understand the use, I find it very beneficial for my life and my appreciation for pen-to-paper.

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To understand what I’m talking about, open up Instagram (or Pinterest, or even Google) and just search “bullet journal.” You’ll soon find post after post of frilly, sticker-filled, calligraphy-laden journal pages.

The simple method of writing down bullets of tasks has been hijacked to become a competitive art form.

Don’t get me wrong, I like looking at this stuff because I dig the creativity. But, do I have time to do that myself? No! For honesty’s sake, I’ve tried just for fun and it takes too much damn time.

With this is mind, this new-found method of Bullet Journaling as an art is something that: a) defeats the purpose of accomplishing tasks quickly as you’re setting yourself back with the nifty art, and b) entrepreneurs, freelancers, executives, or anyone busy would not have time for.

Most of these people posting artistic Bullet Journal pages on Instagram are younger and have more time on their hands (and if you want to spend your time doing that, do you, man).

But, it goes against the simplistic method of Bullet Journaling. The intent of the method.

And, beneath the washi tape, stickers, and different colored pens, usually lies a list of: put away laundry, feed cat, post on Insta. So, this is being done more for the sake of art than for employing the method.

Again, I’m all for art and for people following their passions and creativities, but it stands to reason that this should be something separate from the concept of Bullet Journaling, as it has become a caricature of the original method.

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