The improvement in the current housing market has rejuvenated the practices of “pocket listings” in Arizona short sale and other real estate transactions. Pocket listings can be defined as a practice where the agent reserve homes for serious investors/buyers only.
Any home suitable for sale is listed in databases known as the MLS (multiple listing services) and the information is shared along a wide network of agents looking for appropriate buyers. These properties are marketed through open houses and listed on different real estate websites.
What are pocket listings?
Pocket listing is a practice under which properties are not disclosed in the market and brokers show these properties only to the buyers who are willing to put down money for the property. Generally these deals are closed within a short period of time.
Pocket listings are beneficial for high-end sellers who are not interested in entertaining every average buyer for their property. For properties listed in the MLS database, sellers often have to entertain a large number of buyers curious about the property. Pocket listings ensure the privacy of the property and even create an exclusivity for the house.
Do they work?
However, pocket listings are not limited to high-end sellers. In hot real estate markets including Los Angeles and Manhattan, pocket listings are gaining the opportunity among moderately priced homes. Most of the agents tend to find buyers in their available list or get some necessary help from fellow agents. Most of the houses fairly priced are easily sold with pocket listings. In case the house is not sold at the offered price, the seller is advised to readjust the price and add it to MLS. It can be extremely helpful in Arizona short sale market.
Many sellers are not interested in a public display of the property. They choose “pocket listings” for a sure deal and these sellers are not motivated enough to put in all the efforts. Their only concern is to get a good price.
However, these pocket sales are not endorsed by everyone. The practice of pocket listing is in violation of the Universal Co-Brokerage Agreement in the New York area. Pocket listing is only allowed if the seller has requested to do so. Some agents often try to convince sellers for pocket listings as it allows them to earn double commission from both seller as well as buyer side.
According to legal experts, when the agents start putting their individual economic interest in a deal, it is against the law. There may be cases where an agent may promote their buyer for better commission even if other higher bids are available. Somehow, the practice of pocket listing is conducted fairly by most of the agents. Although, some agents believe that a public listing can get the best results and price for your property. The National Association of Realtors has not mentioned any special guidelines or policies for pocket listings.
What do you think?
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