Are you planning to sell your home? If you are like most people, you might want to have the property listed on the Multiple Listing Service (MLS) so as to attract as many buyers as possible. The MLS is the official database where real estate agents provide and find information about properties on the market in their area. However, another option to consider is a pocket listing.
What is a pocket listing? What are its pros and cons? Where you can list your pocket homes for sale? These are some of the questions that will be answered in this article.
Related: Your Guide to Pocket Listings
What Is a Pocket Listing?
So, what is a pocket listing in real estate? Also referred to as an off-market listing or an exclusive listing, a pocket listing is a kind of real estate listing that isn’t advertised in the MLS. Instead, the home is marketed privately. Besides the MLS, you will not find pocket listing homes on major sites like Trulia, Redfin, Realtor.com, or Zillow.
However, it is important to note that a pocket listing is not the same as a For Sale By Owner (FSBO) property. While FSBO means selling property on your own, a pocket listing will require you to work with a listing agent.
How Do Pocket Listings Work?
When you hire a realtor to help sell your property the traditional way, you enter a listing agreement with the agent. The realtor will then place your listing on the MLS for other agents and brokers to see. The information is also aggregated by other listing portals like Zillow and Realtor.com so the general public can access it.
With a pocket listing, however, the agent will market your home to prospective buyers by word-of-mouth or via private listing platforms that limit who can view details about the property.
Are Pocket Listings Legal?
Though pocket listings are legal, they can be detrimental to the real estate market as a whole. Since pocket listings are not listed publicly, industry professionals find it difficult to get a good idea of how many properties are selling in a specific area. This can end up impacting home values for whole neighborhoods. In addition, when homes are being marketed privately, it is not easy to tell whether fair housing laws are being violated.
Due to all these considerations, The National Association of Realtors (NAR) recently created a ‘Clear Cooperation’ policy which demands that properties be listed on the Multiple Listing Service within one business day of marketing to the public. However, the good news is that non-members are not bound to the trade association’s rules.
When a Pocket Listing Is the Best Option
A pocket listing makes sense in the following situations:
- You already have a buyer: Let’s say you are considering selling your property and a friend or family member has already expressed interest in purchasing it. In such a situation, all you need is a real estate agent to facilitate the transaction. It wouldn’t make sense to list your home on the MLS in order to attract other buyers. A pocket will simplify the process and allow you to complete the sale much faster
- You want privacy: Once a property is listed on the MLS, it is available for everyone to see. If you don’t want everyone to know you are selling, it would be advisable to go for a pocket listing. Some of the people that seek anonymity when selling are the rich and famous, politicians and prosecutors or judges
- You want to test the market: A pocket listing can help you see if potential buyers are interested in the property at the current asking price. If you realize that your asking price is too high or too low, you can set a more realistic asking price before listing on the MLS
- You are selling an expensive property: There is a limited market for homes that are large and expensive. Therefore, such a home would be out of place in the MLS
Downsides of a Pocket Listing
While pocket listings have their advantages, they come with several downsides. Here are a few:
- Fewer offers: Not having a listing on the MLS or major sites like Trulia or Zillow means less exposure for your home. Fewer people will have a chance of making an offer on your pocket listing. As a result, you might end up getting less money than what you would have gotten in a bidding war
- More days on market: Since pocket listings don’t get as much exposure as properties listed in the open market, you might have to wait a little longer to find someone who is willing to pay your asking price. At some point, you might even have to lower your price in order to attract buyers
- Conflict of interest: With pocket listings, the listing agent is also responsible for finding a buyer for the home. Once the buyer is located, the same agent might end up handling both sides of the transaction. Though they are meant to act in your best interest, they will also want to get the best price for the buyer. This can make pocket listings very complicated
Where to List Your off-Market Property for Sale
Looking for a place to market pocket homes for sale? Try the Mashvisor Property Marketplace.
Mashvisor is a respected real estate site where buyers can find and analyze Airbnb and traditional investment properties all over the US real estate market. It uses predictive analytics and property data that are helpful when making buying decisions. Buyers have access to investment tools like the Property Finder, the Real Estate Heatmap, Mashboard, the Real Estate Investment Calculator, and the Mashvisor Property Marketplace. When used together, these make up the ultimate toolkit for any buyer looking for property.
The Mashvisor Property Marketplace allows you to list a wide range of non-MLS properties including bank-owned homes, short sales, auctioned homes, foreclosed homes, and even tenant-occupied rentals. Buyers can use the following filters to find exactly what they are looking for:
- Location
- Miles
- Budget
- Rental strategy (Airbnb or traditional)
- Listing type (needs, repairs, tenant-occupied, foreclosure, etc.)
- Number of bathrooms
- Number of bedrooms
- Desired cap rate
- Desired cash on cash return
When you list pocket sales on the Mashvisor Property Marketplace, you will be required to add basic information including:
- State
- Street address
- City
- Zipcode
- Property type
- Status (off-market, pending, active, etc.)
- Listing type
- Number of bathrooms
- Number of bedrooms
- Asking price
After submitting these details, your home will be marketed to hundreds of agents, investors, and other ready buyers that are ready to make a move. You will be able to communicate with potential buyers directly through the platform.
Related: A Review of Mashvisor Tools
Conclusion
If you have always asked yourself ‘what is a pocket listing?’, you have your answer. In addition to knowing the pocket listing meaning, you are now aware of the benefits and downsides of a real estate pocket listing. While pocket listings have their place in the housing market, there are times when it makes more sense to go the traditional route of listing on the MLS. Weigh the pros and cons and decide if a pocket listing is the best strategy for selling your home.
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