What are pocket listings and why are they on the rise?
In the past few months, I’ve noticed an uptick in the number of ‘pocket listings.’ Here’s a quick look at what pocket listings are, why they’re becoming more commonplace, and what it means for sellers and buyers.
What is a pocket listing?
A pocket listing is a property in which an agent has a signed listing agreement with a seller. But unlike traditional listings, the property isn’t officially listed in the MLS, and other traditional forms of marketing may be downplayed, too.
Also known as a quiet or off-market listing, a pocket listing is, in essence, a property that an agent keeps tucked away in his or her ‘pocket.’
Why are we seeing more pocket listings today?
The real estate market is particularly challenging right now. There are a lot of properties out there, competing for fewer buyers. The buyers who are active are skittish. And they’re looking for the best possible deal. Many aren’t sure we’ve seen the housing bottom yet. The result is that it’s taking longer to sell a home, now that the tax credits and other incentives have dried up.
As soon as your home is listed in the MLS, the clock starts ticking. The longer your home sits on the market, the more ‘stale’ it becomes, and the less money you’re likely to be offered. Buyers, seeing that your home has been for sale for 30 or 60 days or even longer, will inevitably give you low-ball offers.
That’s where pocket listings come into play.
With a pocket listing, you and your agent can quietly test the market without adding it to the MLS. You can gauge reaction to the price you’re asking and see what kind of traffic you get, without the MLS clock ticking.
The agent gets the word out about the property using various marketing methods except the MLS—holding an open house, adding a listing on Craigslist, and word of mouth with other agents.
Sometimes pocket listings eventually get entered into the MLS. But in other cases they’re sold without ever making it into the database.
What this mean for sellers and buyers
If you’re a seller, you should consider testing the waters with a pocket listing, even if it’s just for a week or two. You’ve got nothing to lose.