What is a Pocket Listing and Who Benefits in the Northern Virginia Real Estate Market?
If you have ever watched “Million Dollar Listing: Los Angeles” you will quite frequently hear one of those slick, hyped up, incredibly young, Bentley driving, super agents talk about their “pocket listings“.
Just exactly what is a pocket listing and who really benefits from it? A pocket listing is a listing that is never added to the multiple listing service and for all intents and purposes is never made public.
The Million Dollar Listing boys – as well as some local agents – would have you believe that this is a perfect way to sell real estate.
No uncouth personalities, no muddy shoes, no “lookie lou’s” tramping through your house – just a small select, pre-screened audience of potential buyers. Sound good? Well, let’s look a bit deeper at some the issues.
Perceived Issue #1: “I need privacy. I don’t want everyone to know I’m selling my house, or know my address, or see pictures of the inside of my home.”
Multiple Listing Services (MLS) have the ability to allay this issue. A homeowner can list their property with an agent on the MLS, but restrict the listing information to totally preserve their privacy. A photo of the view away from the home could be the only image in the listing. The address can be undisclosed, as well as the owner’s name.
The listing could simply state a five-bedroom home is available for sale at a particular price in a certain neighborhood. All inquiries would go through the listing agent, who would then screen buyers and only allow showings to serious, pre-qualified candidates.
Perceived Issue #2: “I don’t want lots of people walking through my house. I’ll give my agent a price, and then if they are as good as they say they are they’ll find me a buyer.”
First, a homeowner can always limit showings. They can be as limited to one hour/week. The rest of the week no one is allowed through the home. Although this is limiting for potential buyers, it still allows the entire buying public to see the home is on the market and to schedule an appointment.
Second, and more importantly, homeowners often underestimate the value of their homes. Selling your home at a pre-defined price, without testing the market to see if there are higher bidders, can leave a lot of money on the table. With bidding wars and homes selling above list price in this market, homeowners risk a significant loss of profit when selling their home without exposing it to the full market of buyers.
Perceived Issue #3: “If my house doesn’t sell right now, I don’t want there to be a record of it on the MLS being an unsellable property.”
If a homeowner truly wants to sell their home, the most likely place for success is on the MLS where the most potential buyers will see it. Some homes only get one offer after months on the open market.
If they had been exposed only to a small number of buyers in a pocket listing, the chance they would have been sold would be significantly lower.
By trying to limit negative exposure, the home seller in this case would also be limiting the most important factor, positive exposure.
Bottom line – the only person who really benefits from a pocket listing is the agent. Want to know more? Check out this Washington Post article by Coldwell Banker Regional Sales Vice President Rick Hoffman.
Virginia and Michael