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Pocket Listings--They're bad, they're ugly, but I guess they are not going away

By Elliott S. Topkins

Services for Real Estate Pros with Topkins & Bevans-etopkins@topbev.com

March 17, 2011 11:47 AM

I have to start this post by stating, in no uncertain terms, that I am not a Realtor. I have to admit that I have considered becoming one ,from time to time, especially as I have sharpened some of my sales skills. But deep down, I could never leave the profession I have toiled at for more than forty years, that of a Massachusetts real estate lawyer.

Having said all this, there is one facet of being a Realtor that I find fascinating, and I really didn't know it existed until I stumbled upon it a few months back trying to find a suitable luxury Condominium in my home city, Boston. for a friend. Like most people, I thought that the only place to look was the MLS listings, and there was nothing there that worked for my friend. I happened to be speaking to a Realtor with whom I do a lot of work, and she told me about Pocket Listings, those listings that do not make the MLS for the following reasons:

•1. The people who own do not want a bunch of strangers tromping through their homes. Once the property is on MLS, it is fair game for all.

•2. The same people are concerned that if there is an MLS Listing, and the property remains unsold for a while, it will hurt the value.

•3. The same people are concerned that open house attendees will steal their valuables.

Whatever their reasons, now that I have gotten into the topic, I find that almost all of my favorite Realtors have a Pocket Listing or two. It is almost a mark of their stature that they have a few deals that are not for everyone. I am sure that there are some negative ethical connotations here, and I do not choose to make this post a comment on the appropriateness of Pocket Listings in a free and open society. I just wanted to tell all of you that I now know that this animal exists, and it has certainly spiced up my life asking my friends in our business what they might have which "isn't for everyone".

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Wendy Rulnick

Rulnick Realty, Inc. - Destin, FL

"It's Wendy... It's Sold!"

Elliott - I also suspect that these agents who have these "pocket listings" probably don't really have listings. They just know someone who said they "might" sell "if" the agent had a buyer (someday).

Mar 17, 2011 11:53 AM

Elliott S. Topkins

Topkins & Bevans-etopkins@topbev.com - Boston, MA

Massachusetts Real Estate and Title Atty

You may be right, Wendy, but in this instance, there was a ready, willing and able seller who just didn't want to list. I never even knew this shadow situation existed.

Mar 17, 2011 11:56 AM

Paula Hathaway, REALTOR, LBA

Douglas Elliman Real Estate - Southampton, NY

...A Local Expert in all The Hamptons

Elliott: Excellant topic for this bunch! I think I can hear it now:"..But it's not really a pocket listing!" and "..but I can't help it if the owner does not want to list it publicly"...these are the things that agents will say if someone asks about a property is purchased with out one single bit of exposure to the real estate community. The fact is that any time a property trades with out being listed, it IS a pocket listing!!! No 2 ways about it--I ahve been in a position to show a property without a listing and I refuse to show it unless am able to put something in our system to show that it is an official listing. ..Can't wait to see your other comments!!!

Mar 17, 2011 11:56 AM

Dan & Laurie Pittsenbarger Team

Keller Williams Western Realty - Bellingham, WA

Lakeside & Coastal Single Family Homes

Perhaps "pocket listing" is a misnomer but it is true that it's commone for agents to know about "unlisted" properties with owners that would like to sell. So, they are not "listings" but "pocket listing" is the common term used when an agent has knowledge of a willing seller that perfers to not "list" their home/property.

Whether not this would be a wise choice for a seller is a matter of huge debate. But as Elliot mentioned there circumstances where "pocket listings" save the day.

And seller's lists reasons for not wanting to "list" their property are very very numerous. A small minority even choose it as a strategy (even if the don't have any "negative" considerations about listing - it simply makes the buyer feel "special" to find and purchase the unlisted property only a few know about.

Mar 17, 2011 12:20 PM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

Perhaps this is semantics but I have had a few "pocket listings" where the owners new I worked with a lot of buyers in their area and if I had a qualified interested party we could show the property and they would pay me a fee. No advertising just word of mouth, never shows up in the MLS. Then I've had listings where the owners gave me permission to advertise the property before it will be listed in the MLS and they would pay both a listing and selling agent commission. Not really a pocket listing but a quiet listing?

Mar 17, 2011 01:08 PM

Conrad Allen

Re/Max Professional Associates - Webster, MA

Webster, Ma, Realtor

Hi Elliot - NAR's studies show that 90% of all real estate transaction have an agent involved. The other 10% might include "pocket listings" but the majority of them are friend to friend or relative sales.

Mar 17, 2011 01:12 PM

Lynn B. Friedman CRS Atlanta, GA 404-617-6375

Atlanta Homes ODAT Realty - Love our Great City - Love our Clients! Buckhead - Midtown - Westside - Atlanta, GA

Concierge Service for Our Atlanta Sellers & Buyers

Dear Elliot,

How about this one for a semi-"pocket listing"? In the Atlanta market, you MUST enter the listing in the MLS within 72 hours - no exceptions.

We are competing for the listing for a tear-down (something you see all over Newton) in an expensive neighborhood like the one near Wellesley College.

So far, without identifying the address, just the neighborhood, I called three of the seven architects that work in that area. I am hoping that I will generate interest before the listing is formalized and I have to put it in the MLS. If we get the listing, I hope to have a Buyer lined up! If not - both sides then I would at least have the Buyer ready! One side is better than none - right?

So that is a "semi" pocket listing.

Have a happy day -
Lynn

Mar 17, 2011 02:42 PM

J. Philip Faranda

Howard Hanna Rand Realty - Yorktown Heights, NY

Associate Broker / Office Manager

They are rare in my area and quite justifiably considered an anathema. Listings need exposure and I cannot imagine a scenario where less exposure is better.

Mar 17, 2011 03:27 PM

Mike Jaquish

Realty Arts - Cary, NC

919-880-2769 Cary, NC, Real Estate

Elliott,

Here in the Triangle MLS area, "Pocket Listing" evokes visions of subterfuge and misleading Sellers. Generally, it would mean that the REALTOR withheld the property from MLS without the owner's informed consent.
Unethical as could be.

On the other hand, if the agent takes the listing agrees when an owner wants it off the MLS or off the internet, it is incumbent on the agent to find alternative means of marketing, if he takes the listing at all.
Nothing unethical in that second scenario, I think.

Mar 17, 2011 04:34 PM

Ann Bellamy

Hard money lending for investors in NH and MA - Tyngsboro, MA

Lending to real estate investors since 2006

It seems to be the norm in commercial real estate - my buyer broker regularly calls other agents to find out what they have available. In many cases, the seller doesn't want the tenants to know he is selling.

Mar 17, 2011 11:45 PM

Donne Knudsen

Los Angeles & Ventura Counties in CA - Simi Valley, CA

CalState Realty Services

Elliott - Here in Los Angeles & Ventura counties, the only type of "pocket listing" I have seen is where a Realtor/agent will have an agreement to not list the property in the MLS for a period of time (usually a couple of weeks) with the intention of the listing agent to market the property exclusively to the listing agents SOI, buyers or their brokerage first. If after the designated period of time, the listing agent does secure an offer, then the property goes on the MLS. I am sure there are other examples of "pocket listing" but that's the only I know of.

Mar 20, 2011 12:07 PM

Inna Ivchenko

Barcode Properties - Encino, CA

Realtor® • GRI • HAFA • PSC Calabasas CA

Nope, they are not going away, they've been before and they will stay.

I just read this NAR article about pockets, quite interesting too:

http://realtormag.realtor.org/daily-news/2012/11/26/pocket-listings-become-growing-concern?om_rid=AAD7vb&om_mid=_BQuByDB8vaN4AE&om_ntype=NARWeekly

Dec 03, 2012 06:45 AM