They're B a a a a c c k! Pocket Listings are here again with promise

By
Real Estate Agent with Keller Williams Eastside Market Center 10694

It’s been a few years since it’s been a “Hot Topic”...

but it has been through the wash several times over the decades...

www.kirklandhomevalues.com

5 truths about 'Pocket Listings'

Sellers will bite at the right price, but there are ground rules
                               
By Mary Umberger, Wednesday, December 8, 2010.   News
Mary Umberger is a freelance writer in Chicago.



When is a house for sale -- but (sort of) not for sale?


When it's what's known in the real estate business as a "pocket listing," a house that may be marketed by an agent, though it's not to be found among other homes for sale in a multiple listing service -- it's in the agent's "pocket," instead.


www.kirklandhomevalues.com

They're more common than the average consumer might think, according to James Kinney, vice president of luxury home sales for Baird & Warner Real Estate in Chicago, but they can be tricky for both the agent and the homeowner.

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Five things to know about pocket listings:


1. Homeowners try them out for various reasons, but mostly they're motivated either for reasons of privacy or because they're not terribly serious about selling, Kinney said.

 

"Some of the sellers are what I call 'fear of commitment' people," Kinney said. "They're not quite ready to sign a listing agreement and go official. They say, 'Before I sign a listing, let's date.' "

 

Others are concerned about their privacy, he said.


"Sometimes, if they have a certain amount of notoriety, maybe a recent, very public divorce or have had a recent tragic accident, or if they're just a famous person and they feel like part of the traffic (of potential buyers) they're going to get are really just curiosity seekers, they'll want a pocket listing," he said. "Sometimes, maybe they just don't want their ex-wife to know the house is for sale."



2. A true pocket listing is when a homeowner and an agent have a casual agreement that if the agent comes across someone who might be a candidate to buy, the agent will bring that person to see the house.

 

"You might have a seller who says to the agent, 'For the right price, I would sell, but I don't want 800 people coming through on a Sunday or to deal with somebody who offers me a lowball offer because he thinks I have to sell,' " he said.

 

"They say, 'If I got the pie-in-the-sky great offer, I'll move, so if you know anyone who wants to pay, say $3 million for this house, then we'll show it and I'll pay you a commission.' "  www.kirklandhomevalues.com

It's probably wise in those cases, Kinney said, that if the agent does produce just such a candidate, the agent and the homeowner sign a "single-client" agreement that covers just that instance. Not only does it entitle the agent to an agreed-upon commission should a deal transpire from the showing, but the homeowner also would know, upfront, the agent's expectations.

 

3. Some sellers are more intent than those "maybe, someday" pocket listings, but they're still not ready for all of the commitments of being listed, he said. They want the agent to engage in at least some marketing of the house -- but to keep it out of the local multiple listing service.

 

In such a case, the agent might put the word out to other agents that the house is available, or maybe even advertise it (in general terms) online, but still without the agreement. Again, the "single-client" agreement would be in order for these cases, he said.

 

4. Then there are the cases where there's a signed listing agreement and the homeowner wants active marketing but still doesn't want to be in an MLS.

 

Such listings aren't true pocket listings, but they're listings that are "exempt" from MLS rules, Kinney said.  Most multiple listing services have agreements with participating agents that require every listing to go into the MLS data base, so in exempt listings, the agent will need to obtain a letter from the seller that formally asks the house to be left out, he said.

 

5. Pocket listings can have their advantages, but generally they're not the best tactic for most sellers -- or for most agents, Kinney said.

 

The negatives for the agent are the aforementioned misunderstandings that might occur with sellers when the terms of what, exactly, the agent will do and how he or she will be compensated aren't spelled out, he said.



It's also frustrating when the agent has done some work to find a buyer but there's nothing in writing to induce the homeowner to stick to the plan -- and he ends up going with another agent, he said.

 

"Some agents go along with a pocket listing to 'train' a seller to be a seller," he said. In those cases, the homeowner has more time to get the house ready for the broader market and to get used to the idea of people coming into their home, he said.

And, he said, as a longtime agent and as a former president of a MLS, he said he's personally sold on the notion of putting the house "out there" for as many consumers to consider as possible by putting it into the MLS.

"And if you (as a seller) think you're going to keep it a secret that you want to sell your house" by going with a pocket or exempt listing, forget it, Kinney said.

"All you have to do is tell just one person," he said. "It will be out there. In reality, in two seconds, they'll find out."


Although this was done in 2010 it obviously has been around longer than that.  I suspect it was in fact the norm prior to the systemization of listings in general - before there were agents there were still transactions done every day.

First one I heard about was in Genesis.  But there was an agent - an agent of God.

JL4PL

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Show All Comments
Rainmaker
570,044
Bill Gillhespy
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos
16 Sunview Blvd

Hi Phil,  I've had several pocket listing agreements but the seller wants to remain low profile and not have to deal with the mob scene.

June 23, 2012 10:40 AM
Rainmaker
340,048
Gina Chirico
Real Estate Agent - Essex County, New Jersey
Lattimer Realty

I don't really think pocket listings help sellers at all!  I wonder if the agents taking pocket listings explain EXPOSURE to the seller.  I wonder if they explain dual agency to the seller and to any buyer interested in the listing.  Either you want to sell your home or you don't!  It's that simple in my opinion.

June 23, 2012 12:08 PM
Rainmaker
366,117
Laura Filip
THE SIGN OF SOLD STARTS HERE. CALL US TODAY
RE/MAX UTOPIA WHITESBORO,SHERMAN,DENISON TX,TEXOMA

Pocket listings interesting thought not much to talk about nothing in writing nothing to stand on so why even talk about it. Have a blessed day

June 23, 2012 12:27 PM
Rainmaker
477,913
Robert L. Brown
Grand Rapids Real Estate Bellabay Realty, West Michigan
www.mrbrownsellsgr.com

I never had one. Too many variables that could go wrong. If you want to sell list your home. If you don't oh well.

June 23, 2012 12:44 PM
Rainmaker
1,153,440
Cheryl Ritchie
Southern Maryland 301-980-7566
RE/MAX Leading Edge www.GoldenResults.com
Sometimes it takes a few days to finish cleaning up or moving out or repairing items so there can be a great pocket listing that is delayed a few days to be ready for the market!
June 23, 2012 01:17 PM
Ambassador
1,481,819
Tammy Lankford
Your Lake Sinclair Expert (706-485-9668)
Lane Realty

They were never gone in my market and I read this same article somewhere else just the other day.

June 23, 2012 01:31 PM
Rainmaker
653,973
Joetta Fort
Independent Broker, Homes Denver to Boulder
The DiGiorgio Group

So, am I correct in thinking example #2 is when the seller doesn't believe anyone will pay the price they want?  IMHO - they're probably right.

June 23, 2012 01:49 PM
Rainmaker
997,406
Karen Fiddler, Broker/Realtor
Laguna Beach & Lake Arrowhead, CA (949)510-2395
HOM Sotheby's Intl Realty, 949-510-2395

Typically our "pocket listings" are those where we don't have them entered into the MLS for showings for a week or two after signing the agreement, but during this time the listing agent and/or their office can bring buyers by. We use this when it's a hot market and the sellers are hoping for a quick deal with the least amount of inconvenience.

June 23, 2012 02:11 PM
Rainmaker
338,151
Lloyd Binen
Silicon Valley R since 1976;408-565-8177
Certified Realty Services

Unless a home is exposed to the entire Silicon Valley market via MLS, no one knows how much it'll sell for.  That's especially true in the hot market we currently have where prices are rountinely bid up.  Limiting market exposure can cost the seller hundreds of thousand of dollars.  If the seller understands and agrees to that (and signs something to that effect), then a pocket listing is fine.  Otherwise a pocket listing violates an agent's fiduciary duty.

June 23, 2012 02:55 PM
Rainmaker
973,701
Sharon Alters
Your Fleming Island Relocation Agents.
Coldwell Banker Vanguard Realty

We know some people who want to sell but don't want to list but will sell - yes, the pcket listings are back.

SHaron

June 23, 2012 06:06 PM
Ambassador
2,366,335
Patricia Kennedy
For Your Home in the Capital
Evers & Company Real Estate, Inc.

Phil, pociet listings may have some plusses, but they are for the listing broker and not the client.

June 23, 2012 06:23 PM
Rainmaker
1,033,776
Joan Whitebook
Consumer Focused Real Estate Services
BHG The Masiello Group

Interesting discussion.. I have heard of pocket listings, but really had not considered all the pros and cons that you point out.

June 23, 2012 06:43 PM
Rainmaker
1,322,592
Charles Stallions
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.
Charles Stallions Real Estate Services

I have done a many on vacant lots or commerical but I won't do it on homes.

June 23, 2012 06:50 PM
Ambassador
1,550,626
Christine Donovan
Broker/Attorney 800-610-7253 DRE01267479 - Costa M
Donovan Blatt Realty
Phil - I woudln't want to spend a lot of time marketing a home that I didn't have a contract to sell.
June 23, 2012 07:30 PM
Rainmaker
567,772
Hella Mitschke Rothwell
Hawaii & California Real Estate Broker
(808) 226-1095 or (831) 626-4000

Phil, I have one client like that. But because HE is not committed to me, I am not 100% committed to him either. When I do have someone who is interested, I make sure I have that single person listing signed. But it's such a hasstle because the prospective buyer might not be THAT comitted, so when the owner asks what ever happened to so and so, well...nothing. Whereas if you have a listing, you go through quite a few of these people before you find that one buyer. And I certainly don't do a full on marketing program for them. So the pocket listing, in my opinion, does not serve the seller or the agent.

June 23, 2012 10:10 PM
Rainer
20,969
Tyler & Mike Bolaski
FirstTeam Real Estate

My definition of a pocket listing is a listing with an exclusive listing agreement signed....but just not put in the MLS for whatever reason. 

A listing without a listing agreement is not a pocket listing.......it's AIR! 

June 23, 2012 11:06 PM
Rainmaker
647,360
Evelyn Kennedy
Alameda, Real Estate, Alameda, CA
Gallagher & Lindsey, Alameda, California

Phil:

A client of mine keeps telling me that he will sell his house for such and such a price.  Of course, the price in way too high.

June 23, 2012 11:13 PM
Rainmaker
304,599
Inna Ivchenko
Los Angeles / Valley Homes
Mannis Real Estate Group

We see it a lot with short sales these days~ and I personally get it.

Yet,  i do not think a pocket listing serves a standard client well~~ since there is no competition for the listing( well, sometimes agent protected if it is his/her expired listing).

In today's sellers' market the seller needs to be aware of the fact that they may not be getting the best price for their home.

December 03, 2012 02:34 PM
Rainmaker
572,328
Phil Leng
Phil Leng Team - Residential Real Estate Experts &
Keller Williams Eastside Market Center

Inna,


Yes, the ideal is to have the listing public, for the best exposure in the shortest time.  But occasionally, particularly when dealing with luminaries and celebrities, they insist on anonymity and discretion.  Ultimately we must comply with our clients’ requests.


Two-edged sword, definitely.

Thanks for your comment!  How did you find such an old blog?

December 03, 2012 03:10 PM
Rainmaker
304,599
Inna Ivchenko
Los Angeles / Valley Homes
Mannis Real Estate Group

True, pocket listings are now 'the hot topic'', that's why i was looking what ARers think on it:)

Here in CA, there is a huge debate about pocket listings, there is a webinar C.A.R. offers: http://www.car.org/newsstand/hottopicswebinarseries/

April 26, 2013 07:07 PM
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Rainmaker
572,328

Phil Leng

Phil Leng Team - Residential Real Estate Experts &
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