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.
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!)