REAL ESTATE AGENT / DEFINITIONS

What are Pocket Listings in Real Estate?

Real Examples for 2024

By: Joe Stephenson

What are Pocket Listings?
Examples
Pro's and Cons
How Pocket Listings Work
MLS Listings vs. Pocket
Newsletter

Definition

A pocket listing is an exclusive real estate listing that isn't publicly advertised on the Multiple Listing Service (MLS).

Instead, real estate agents and brokers market these properties through private channels to potential buyers within their personal network or to other real estate professionals.

Examples of Pocket Listings

Consider a high-profile celebrity who wants to keep their home sale hush-hush to avoid unwanted attention.

They might choose a pocket listing to maintain privacy.

Or, a seller might test the market with a pocket listing before deciding on a realistic selling price.

Pocket listings exist as an option for people who wish to work with listing agents to find home buyers in a different, usually more private, way.

I for one know how challenging it is to get real estate listings, especially if you are just starting out.

So learning as much as you can will help you.

Pros and Cons for Sellers and Buyers

For the seller, the advantages of a pocket listing include privacy, control over who sees the property, potential to generate interest through exclusivity, and the ability to test the waters before setting an asking price.

However, the cons include limited exposure, which could lead to a lower price due to less competition, and a longer time on the market.

On the other hand, buyers of pocket listings have the benefit of fewer people bidding on the property, potentially securing it at a lower price.

They also get access to exclusive real estate not available on the open market.

The disadvantages include a smaller pool of properties to choose from and the lack of transparency regarding price history and comparable sales.

Why Sellers Might Use Pocket Listings

Sellers might use pocket listings for various reasons.

Privacy is a significant factor, especially for public figures or sellers who wish to keep their sale private.

Additionally, pocket listings allow sellers to bypass the high-pressure environment of bidding wars that can occur with publicly listed properties.

How Pocket Listings Work

In a pocket listing, the seller signs a listing agreement with a real estate agent, but instead of the property being listed on the MLS, the details are kept 'in the pocket' of the listing agent.

The agent then markets the property discreetly—through word of mouth or private connections—to other agents or prospective buyers.

Advantages and Disadvantages of a Pocket Listing

While pocket listings can provide privacy and exclusivity, they also raise concerns about fairness and transparency.

They limit the pool of potential buyers, which could result in a lower selling price for the seller.

For the buyer, the private nature of these transactions can make it difficult to determine if they're getting a fair deal.

Pocket Listings And The Real Estate Market

Pocket listings are not as common as MLS listings—only a small percentage of homes sold nationwide are off-market listings.

They do play a role in the real estate industry, especially in high-end markets where privacy and exclusivity are valued.

How MLS Listings Compare to Off-Market Listings

MLS listings provide maximum exposure to a property by making it visible to all real estate agents and potential buyers searching the database.

In contrast, off-market listings are only accessible to a select few, limiting their visibility but offering a more targeted approach.

How To Find Pocket Listings

Finding pocket listings requires networking with real estate professionals who often deal with such listings.

You can also work with a real estate agent who has access to these types of listings or use platforms that specialize in off-market properties.

What is the Pocket Listing Policy for Real Estate Agents?

The National Association of Realtors (NAR) has a "Clear Cooperation Policy" that requires its members to list any property they market on the MLS within one business day.

However, this policy does not apply to office exclusive listings, which are marketed without the help of other agents.

While pocket listings may not be suitable for everyone, they can be a viable option for those prioritizing privacy or seeking unique properties.

As with any real estate transaction, it's essential to work with trusted industry professionals to guide you through the process.

Why it is Important to Learn About Pocket Listings as a Real Estate Agent

As a real estate agent, understanding pocket listings can significantly enhance your ability to serve both the buyer and seller effectively.

An off-market listing or private listing are a unique segment of the real estate market that require a different approach compared to traditional MLS listings. Knowledge about pocket listings can help you.

Cater to home sellers who value privacy and prefer to avoid the public exposure of an MLS listing.
Provide options to certain buyers who are looking for exclusive properties not available to the general walk-in traffic.
Collaborate with other real estate agents and brokers to share information about off-market listings, thereby broadening the range of properties available to your clients.
Navigate the complexities of pocket listings, such as ensuring accurate sense of property value based on square footage and other factors, which might not be readily available like in an MLS database.
Better manage the home buying process by preparing buyers for potential bidding wars and educating sellers about the trade-offs between exposure and privacy.
Uphold professional standards by adhering to guidelines set by real estate standards organizations regarding pocket listings.

By familiarizing yourself with pocket listings, you can position yourself as a versatile and knowledgeable agent capable of meeting diverse client needs. I find that real estate brokers love that.

Whether working as a solo agent or part of a team, this knowledge can give you an edge in today's competitive real estate landscape.