What is a pocket listing? A so-called "pocket listing" is a property for sale that is not in the MLS system (Multiple Listing Service). That sounds simple but, pocket listings come in different shades of gray.
Sometimes, a pocket listing is merely a home or property that has a signed listing agreement with a real estate broker but has not been entered into the MLS system as yet or paperwork remains to be processed in the short period of time between signatures and data entry. It is possible that an offer can be submitted by a contact of the listing agent, an associate of the broker, a friend of the seller or a neighbor who has knowledge of the sellers intentions to go on the market. Typically, all of the terms included in the listing agreement would apply to those situations.
Other times, a homeowner may want to sell their homes "quietly" and may ask their listing agent to postpone putting the property into the MLS. A seller may feel that they want to avoid the buyer traffic through their house or may want to sell under the radar of their neighbors. This is more of a marketing choice but seldom yields the same results of making the property known to the public. Sellers should be cautioned that excluding the larger pool of potential buyers might seriously reduce the final sales price. All of the studies done overwhelmingly support the fact that exposure in the MLS system equates to a higher sales price.
It would be unusual for a seller not to want the market exposure that the MLS provides. However, there are other things to be considered that are legal, policy and practical concerns. Here are some more notes:
- Realtors are bound by the Code of Ethics to get the best deal for their customers. Only full market exposure will bring the best deal for price and, equally important, the terms of the sale.
- What happens when a similar property in the neighborhood is listed in the MLS for the general public at approximately the same time and sells at a higher price? This would be a frustrating situation for the seller and lead to a blame game. Could there be liability issues or money left on the table?
- Is there a possibility for dual agency conflicts?
- Recently, pocket listings have drawn attention from the U. S. Department of Housing and Urban Development (HUD). There is concern about violations under rules of federal fair housing law. Unfortunately, it gets even more messy because this type of violation comes to light after a transaction and has negative effects on all of the parties involved.
- There is also an issue of MLS rules violations if a non-MLS listing is not reported to the broker to remain in compliance.
- Is it clear who the sellers are and if they actually have the authority to sell the property?
- As a homeowner, have you ever received a letter or been approached by a real estate agent that claims to have buyers chomping at the bit to buy your house? Saving you commissions paid? Avoiding buyers interrupting your daily routine to see the house? Those agents seeking a "pocket listing" with the promise of having their own buyers ready to jump are too good to be true - it just doesn't happen that way in real life.
- As a buyer, wouldn't you want to know if there is a signed listing agreement which institutes rules and laws to protect the participants in a transaction and establishes a contractual relationship between parties? Are you considering a real estate purchase without signing a buyer agreement with your own Realtor?
Non-MLS listings or pocket listings may not be illegal but, they do carry additional complications on several levels which may be hazardous. In addition, rarely does a pocket listing bring the highest and best offer that the market will bring.
If you are thinking about selling your home in Naples or Bonita Springs, there is no magic trick in real estate that is going to be unimaginably easy, circumvent a process and yield fantastic results. There is no substitute for a "no stone unturned" approach to marketing, excellent internet presence for global reach and just plain hard honest work. Contact us for a seller consultation.
If you are considering a real estate purchase in Naples or Bonita Springs, call us to represent your best interests. Our local knowledge and professional experience in the market is priceless but costs you nothing.
Ellie Penaranda at 239-776-5077 or Tim Cranch at 239-272-4848
Ellie@StepsToTheBeach.com TimCranch@StepsToTheBeach.com
LOCAL KNOWLEDGE. GLOBAL MARKETING. RESULTS.
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