Pocket Listings - The Pros and Cons

By
Real Estate Agent with Lyon Real Estate - El Dorado Hills CA BRE# 01499005
http://actvra.in/Wfk
Pocket Listings - The Pros and Cons
 
The real estate market has taken a sudden turn since the first of the year and in El Dorado Hills we are seeing homes come on the market and be pending already. I thought it would be good to look at the pros and cons of these pocket listings.
 
First let's recap what's been going on. For several years Pocket Listings El Dorado Hills real estate has been a buyer's market meaning there was 6 month's of inventory or more. Buyers were in the drivers seat but were reluctant to buy because of the uncertainty of where the bottom was.  If they bought, they wanted a deal that gave them some cushion in case the value dropped further. We were all seeing what the hit in home values did to homeowners.
 
As inventory levels of Foreclosures dropped the good deals started to dry up. Buyers could still find deals in short sales and with regular sellers who had to make a move, for a while at least. But the continued drop in inventory (supply) and the pent up buyers that had been waiting for a sign we had reached the bottom of the market (demand) created the market turn we've seen happen so quickly.
 
Inventory levels are at historic lows and home prices in El Dorado Hills have seen an approximate 12% increase since this time last year. We are now in a seller's market with inventory levels much below 6 months. We are seeing multiple offers on homes priced within reason, even in the upper ranges that is driving the purchase price above the listing price. Homes are selling within days of going on the market . We are struggling to get our buyers in to see a listing before it is gone.
 
Back to the Pros and Cons of Pocket listings. I'll identify the pocket listing as one in which the home is not really exposed to the market.
 
Pros-
* less hassle in getting it prepared for the market (though homes that show better sell for more, homes are selling at all conditions).
* you don't have to deal with people tromping  through your home (again homes are selling within days.
* you may be able to get a break on commission from your agent (though if you get much less for your home than possible, this is not a deal)
 
Cons-
* Not getting exposure to the market doesn't bring you the highest price for your home.
* Missed opportunity from exposure to the market of finding buyers who will take into consideration your needs as a seller;  for example, rent back time, a longer escrow, or maybe a tenant agreement you have.
 
In today's real estate market sellers are in the drivers seat. If your agent is not explaining this, are they really doing what's best for you?
 
Visit my website for El Dorado Hills Market Trends and Sacramento Region trends by County. If you would like to know what your home is worth and what I could do to get it sold call or email me as your best interest will always be my priority!
 

 

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_________________________________________

I am a REALTOR® in El Dorado Hills with Lyon Real Estate. I love living in El Dorado Hills, where homes with views have become my passion. Working with both buyers and sellers, my concentration on homes for sale includes not only El Dorado Hills, but also Folsom and the Cameron Park vicinity. For more information on me or our wonderful area visit my website at www.DeeDeeRiley.com or email me at driley@golyon.com. When you're ready to sell or buy a home – I would love to help! To read what my clients have to say about me and my service, visit my Client Testimonial page.

 
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By DeeDee Riley 2013 *All Rights Reserved*Pocket Listings - The Pros and Cons

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Re-Blogged 1 time:

Re-Blogged By Re-Blogged At
  1. Winston Heverly 06/23/2013 09:32 PM
Topic:
Home Selling
Groups:
Realtors®
El Dorado Hills Real Estate
Tags:
deedee riley reatlor el dorado hills ca
el dorado hills real estate
pocket listings

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Rainmaker
565,962
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

The practice should MOST CERTAINLY be frowned upon by all professionals...  I think it does not allow for highest price, and one of the unintended consequences is that it is keeping some values low in certain neighborhoods, by having a lower comp.  It is then picked up by Zillow and others on their automated valuations, which are generally way off anyhow, but it is NOT allowing those hearty homeowners who have waited so long for the market to come back so they can refinance!  Now, I am fully awaree that somebody refinancing does not help fill Realtor's pockets, but I'm sure a lot of Realtors would like to refinance.  It is greedy brokerages and agents who do this, and from the numbers I've seen of recent sales of pocket listings, they truly hurt neighborhoods.  Usually happening with short sales, it seems, and the lack of higher prices means the taxpayers who back stop the lenders are getting screwed as well.

May 24, 2013 12:02 PM #33
Rainmaker
565,962
Gary Frimann
Eagle Ridge Realty / Signature Homes & Estates - Gilroy, CA
California Broker and REALTOR

It should also be noted that many Brokerages have been sued because of the Seller not being aware that their listing was not placed on the MLS...  These are often settled, as many cases have been, so there is no record of it, but I have heard of a few brokerages that basically forfeited their commission.

May 24, 2013 12:03 PM #34
Rainmaker
586,746
DeeDee Riley
Lyon Real Estate - El Dorado Hills CA - El Dorado Hills, CA
Realtor - El Dorado Hills & the Surrounding Areas

Thanks Lynn Sins for the heads up on my missing percentage figure!

May 24, 2013 12:21 PM #35
Rainmaker
692,771
Jeff Jensen
Annie Mac Home Mortgage - Greenwich, CT

I think there is a place for pocket listings.  Fellow associated Realtors perceive the advantage of having an early shot at a property.

May 24, 2013 01:59 PM #36
Rainmaker
409,905
Michelle Francis
Tim Francis Realty LLC - Atlanta, GA
Realtor, Buckhead Atlanta Homes for Sale & Lease

DeeDee, 

I don't think pocket listings make sense in this market.  We had an owner we lease and property manage for tell me his friend was going to pocket list the house earlier in the year and would I work with them to do showings.  Pricelessly, not one showing in two months.  

The best news is that we got the OFFICIAL in the MLS listing and are moving it forward for the owner's best interest.  

All the best, Michelle

May 24, 2013 02:20 PM #37
Rainmaker
233,633
David Grbich
Ventana Coastal Properties - www.FindCARealEstate.com - San Juan Capistrano, CA
Orange County Real Estate - 949-500-0484

Well said - if a seller wants to maximize their price they need exposure - plain and simple. Regards Dave

May 24, 2013 02:32 PM #38
Rainmaker
156,534
Annette Thor
Connecticut Homes and Commercial Fairfield Cty,CT reinct.com - Westport, CT
Residential & Commercial Real Estate Broker in CT

I can't see how a seller would feel this kind of listing would benefit them at all, That's why they need to choose a skilled agent like DeeDee to give her skilled advice. 

May 24, 2013 03:06 PM #39
Rainmaker
205,347
John F Muscarella
RIVER FARM PROPERTIES, LLC - Plymouth, MA
Broker/Owner, Plymouth County / Cape Cod, MA

Most professionals in my markets frown on these and one MLS mandates a listing within 48 hours if you belong to thier MLS and association.  It's a slippery slope.

May 24, 2013 03:13 PM #40
Rainmaker
983,154
Ronald DiLalla
Century 21 Discovery DRE 01813824 - Anaheim, CA
No. Orange Cty Real Estate

Great topic..thanks for sharing with us in ActiveRain Land.

May 24, 2013 03:54 PM #41
Ambassador
1,291,076
Erica Ramus
Erica Ramus - Ramus Realty Group - Pottsville, PA - Pottsville, PA
MRE, Schuylkill County PA Real Estate

I get the pros and cons. I have had sellers tell me NO MLS exposure, just sell it in house. I tell them the cons and many times we don't sell it. But ... in some cases this does work in the seller's favor. It is all about what the seller wants, not what I want.

May 24, 2013 04:21 PM #42
Rainmaker
847,783
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
your real estate writer

There ARE those sellers who don't want anyone to know their house is for sale. It makes no sense financially, but perhaps they have some kind of valid reason. (Like somone who would enforce a monetary claim on them if the sale became public.)

May 24, 2013 04:43 PM #43
Rainer
294,480
Kimo Jarrett
WikiWiki Realty - Huntington Beach, CA
Kimo's Lifestyle Solutions

Some interesting comments about this issue, yet the seller usually decides the ultimate marketing plan and most agents will accept the sellers terms and conditions to secure the listing, so if the agent isn't listing the property in the public venue, it's probably because the seller instructed him to do so.

May 24, 2013 05:31 PM #44
Rainmaker
980,981
Sharon Alters
Coldwell Banker Vanguard Realty - Fleming Island, FL
Your Fleming Island Relocation Agents.

DeeDee, some of the pocket listings that go pending are For Sale by Owners - that was the case with me on a property now under contract. We are dealing with it here as well. Not sure what the answer is, as there just aren't enough listings and some sell by word of mouth before they can hit the market. Sharon

May 24, 2013 05:38 PM #45
Rainer
176,327
Jimmy Faulkner
Florida. Homes Realty & Mortgage - Wantagh, NY
The Best Of St. Augustine

To find an agent who is going to do what is best for the seller is absurd. Realtors care only about themselves although advertise so differently. They have to advertise that they are honest & sincere just like politicians do only to sell out the people. How long can this last.

May 24, 2013 05:51 PM #46
Rainmaker
1,105,483
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

DeeDee, A very informative post.  I think it is important to let postential sellers know the pros and cons of pocket listings.  I think you presented this information in a very objective way.

May 24, 2013 06:26 PM #47
Rainmaker
980,078
Georgie Hunter
Hawai'i Life Real Estate Brokers - Haiku, HI
Maui Real Estate sales and lifestyle info

Our MLS likes to keep track of "unlisted" sales and we are required to input them upon sale, if a member was involved in the sale.  I think a seller should just get the home listed and get the most exposure possible.

May 24, 2013 09:25 PM #48
Rainmaker
588,379
Wayne Johnson
Coldwell Banker D'Ann Harper REALTORS® - San Antonio, TX
San Antonio REALTOR, San Antonio Homes For Sale
DeeDee-Where inventory is low, it seems like a Seller would want broad exposure to have a better opportunity for competitive offers.
May 24, 2013 09:29 PM #49
Rainmaker
866,706
Fred Carver-Top Realtor Victoria, BC
Re/Max Camosun Victoria BC Real Estate - Victoria, BC
Accredited Victoria BC Real Estate Consultant

Hi DeeDee.....Congratulations on your feature. Wow your market is now a Sellers Market, great news for home sellers. So True Pocket listings do not get a home exposed to all home Buyers, resulting in not giving the Sellers a chance to maximize on a Top selling Price.

Go get those Listings :O))

May 25, 2013 07:34 AM #50
Rainer
8,870
Peter ReJune
Keller Williams Palm Beach - Royal Palm Beach, FL

Interesting article with good and valid points from the perspective of the Realtor as seen from all the replies, however all miss the much larger picture and the many opportunities that pocket listings represent to Realtors.

May 27, 2013 05:10 AM #51
Rainmaker
1,281,099
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I really think a pocket listing is a dis service to the seller.  We need to get them the most exposures and the highest and best offer.

May 31, 2013 04:48 PM #52
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Realtor - El Dorado Hills & the Surrounding Areas
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