They're B a a a a c c k! Pocket Listings are here again with promise

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It’s been a few years since it’s been a “Hot Topic”...

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5 truths about 'Pocket Listings'

Sellers will bite at the right price, but there are ground rules
By Mary Umberger, Wednesday, December 8, 2010.   News
Mary Umberger is a freelance writer in Chicago.

When is a house for sale -- but (sort of) not for sale?

When it's what's known in the real estate business as a "pocket listing," a house that may be marketed by an agent, though it's not to be found among other homes for sale in a multiple listing service -- it's in the agent's "pocket," instead.

They're more common than the average consumer might think, according to James Kinney, vice president of luxury home sales for Baird & Warner Real Estate in Chicago, but they can be tricky for both the agent and the homeowner.

Five things to know about pocket listings:

1. Homeowners try them out for various reasons, but mostly they're motivated either for reasons of privacy or because they're not terribly serious about selling, Kinney said.


"Some of the sellers are what I call 'fear of commitment' people," Kinney said. "They're not quite ready to sign a listing agreement and go official. They say, 'Before I sign a listing, let's date.' "


Others are concerned about their privacy, he said.

"Sometimes, if they have a certain amount of notoriety, maybe a recent, very public divorce or have had a recent tragic accident, or if they're just a famous person and they feel like part of the traffic (of potential buyers) they're going to get are really just curiosity seekers, they'll want a pocket listing," he said. "Sometimes, maybe they just don't want their ex-wife to know the house is for sale."

2. A true pocket listing is when a homeowner and an agent have a casual agreement that if the agent comes across someone who might be a candidate to buy, the agent will bring that person to see the house.


"You might have a seller who says to the agent, 'For the right price, I would sell, but I don't want 800 people coming through on a Sunday or to deal with somebody who offers me a lowball offer because he thinks I have to sell,' " he said.


"They say, 'If I got the pie-in-the-sky great offer, I'll move, so if you know anyone who wants to pay, say $3 million for this house, then we'll show it and I'll pay you a commission.' "

It's probably wise in those cases, Kinney said, that if the agent does produce just such a candidate, the agent and the homeowner sign a "single-client" agreement that covers just that instance. Not only does it entitle the agent to an agreed-upon commission should a deal transpire from the showing, but the homeowner also would know, upfront, the agent's expectations.


3. Some sellers are more intent than those "maybe, someday" pocket listings, but they're still not ready for all of the commitments of being listed, he said. They want the agent to engage in at least some marketing of the house -- but to keep it out of the local multiple listing service.


In such a case, the agent might put the word out to other agents that the house is available, or maybe even advertise it (in general terms) online, but still without the agreement. Again, the "single-client" agreement would be in order for these cases, he said.


4. Then there are the cases where there's a signed listing agreement and the homeowner wants active marketing but still doesn't want to be in an MLS.


Such listings aren't true pocket listings, but they're listings that are "exempt" from MLS rules, Kinney said.  Most multiple listing services have agreements with participating agents that require every listing to go into the MLS data base, so in exempt listings, the agent will need to obtain a letter from the seller that formally asks the house to be left out, he said.


5. Pocket listings can have their advantages, but generally they're not the best tactic for most sellers -- or for most agents, Kinney said.


The negatives for the agent are the aforementioned misunderstandings that might occur with sellers when the terms of what, exactly, the agent will do and how he or she will be compensated aren't spelled out, he said.

It's also frustrating when the agent has done some work to find a buyer but there's nothing in writing to induce the homeowner to stick to the plan -- and he ends up going with another agent, he said.


"Some agents go along with a pocket listing to 'train' a seller to be a seller," he said. In those cases, the homeowner has more time to get the house ready for the broader market and to get used to the idea of people coming into their home, he said.

And, he said, as a longtime agent and as a former president of a MLS, he said he's personally sold on the notion of putting the house "out there" for as many consumers to consider as possible by putting it into the MLS.

"And if you (as a seller) think you're going to keep it a secret that you want to sell your house" by going with a pocket or exempt listing, forget it, Kinney said.

"All you have to do is tell just one person," he said. "It will be out there. In reality, in two seconds, they'll find out."

Although this was done in 2010 it obviously has been around longer than that.  I suspect it was in fact the norm prior to the systemization of listings in general - before there were agents there were still transactions done every day.

First one I heard about was in Genesis.  But there was an agent - an agent of God.


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Re-Blogged 3 times:

Re-Blogged By Re-Blogged At
  1. Lenn Harley 06/22/2012 08:09 PM
  2. Scott Fogleman 06/22/2012 10:47 PM
  3. Gabe Sanders 06/24/2012 08:37 PM
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Bill Gillhespy
16 Sunview Blvd - Fort Myers Beach, FL
Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos

Hi Phil,  I've had several pocket listing agreements but the seller wants to remain low profile and not have to deal with the mob scene.

Jun 23, 2012 03:40 AM #22
Gina Chirico
Lattimer Realty - Fairfield, NJ
Real Estate Agent - Essex County, New Jersey

I don't really think pocket listings help sellers at all!  I wonder if the agents taking pocket listings explain EXPOSURE to the seller.  I wonder if they explain dual agency to the seller and to any buyer interested in the listing.  Either you want to sell your home or you don't!  It's that simple in my opinion.

Jun 23, 2012 05:08 AM #23
Laura Filip
RE/MAX UTOPIA , Serving all of Texoma - Whitesboro, TX
What can we do for you today?

Pocket listings interesting thought not much to talk about nothing in writing nothing to stand on so why even talk about it. Have a blessed day

Jun 23, 2012 05:27 AM #24
Robert L. Brown - Grand Rapids, MI
Grand Rapids Real Estate Bellabay Realty, West Mic

I never had one. Too many variables that could go wrong. If you want to sell list your home. If you don't oh well.

Jun 23, 2012 05:44 AM #25
Cheryl Ritchie
RE/MAX Leading Edge - Huntingtown, MD
Southern Maryland 301-980-7566
Sometimes it takes a few days to finish cleaning up or moving out or repairing items so there can be a great pocket listing that is delayed a few days to be ready for the market!
Jun 23, 2012 06:17 AM #26
Tammy Lankford,
Lane Realty Eatonton, GA Lake Sinclair, Milledgeville, 706-485-9668 - Eatonton, GA
Broker GA Lake Sinclair/Eatonton/Milledgeville

They were never gone in my market and I read this same article somewhere else just the other day.

Jun 23, 2012 06:31 AM #27
Joetta Fort
The DiGiorgio Group - Arvada, CO
Independent Broker, Homes Denver to Boulder

So, am I correct in thinking example #2 is when the seller doesn't believe anyone will pay the price they want?  IMHO - they're probably right.

Jun 23, 2012 06:49 AM #28
Karen Fiddler, Broker/Owner
Karen Parsons-Fiddler, Broker 949-510-2395 - Mission Viejo, CA
Orange County & Lake Arrowhead, CA (949)510-2395

Typically our "pocket listings" are those where we don't have them entered into the MLS for showings for a week or two after signing the agreement, but during this time the listing agent and/or their office can bring buyers by. We use this when it's a hot market and the sellers are hoping for a quick deal with the least amount of inconvenience.

Jun 23, 2012 07:11 AM #29
Lloyd Binen
Certified Realty Services - Saratoga, CA
Silicon Valley Realtor since 1976; 408-373-4411

Unless a home is exposed to the entire Silicon Valley market via MLS, no one knows how much it'll sell for.  That's especially true in the hot market we currently have where prices are rountinely bid up.  Limiting market exposure can cost the seller hundreds of thousand of dollars.  If the seller understands and agrees to that (and signs something to that effect), then a pocket listing is fine.  Otherwise a pocket listing violates an agent's fiduciary duty.

Jun 23, 2012 07:55 AM #30
Sharon Alters
Coldwell Banker Vanguard Realty - 904-673-2308 - Fleming Island, FL
Realtor - Homes for Sale Fleming Island FL

We know some people who want to sell but don't want to list but will sell - yes, the pcket listings are back.


Jun 23, 2012 11:06 AM #31
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Phil, pociet listings may have some plusses, but they are for the listing broker and not the client.

Jun 23, 2012 11:23 AM #32
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Interesting discussion.. I have heard of pocket listings, but really had not considered all the pros and cons that you point out.

Jun 23, 2012 11:43 AM #33
Charles Stallions
Charles Stallions Real Estate Services - Pensacola, FL
800-309-3414 - Pensacola, Pace or Gulf Breeze, Fl.

I have done a many on vacant lots or commerical but I won't do it on homes.

Jun 23, 2012 11:50 AM #34
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M
Phil - I woudln't want to spend a lot of time marketing a home that I didn't have a contract to sell.
Jun 23, 2012 12:30 PM #35
Hella Mitschke Rothwell
(831) 626-4000 - Honolulu, HI
Hawaii & California Real Estate Broker

Phil, I have one client like that. But because HE is not committed to me, I am not 100% committed to him either. When I do have someone who is interested, I make sure I have that single person listing signed. But it's such a hasstle because the prospective buyer might not be THAT comitted, so when the owner asks what ever happened to so and so, well...nothing. Whereas if you have a listing, you go through quite a few of these people before you find that one buyer. And I certainly don't do a full on marketing program for them. So the pocket listing, in my opinion, does not serve the seller or the agent.

Jun 23, 2012 03:10 PM #36
The Bolaski Group
Coldwell Banker Residential Brokerage - Temecula, CA
"Father and son just get deals done!"

My definition of a pocket listing is a listing with an exclusive listing agreement signed....but just not put in the MLS for whatever reason. 

A listing without a listing agreement is not a pocket's AIR! 

Jun 23, 2012 04:06 PM #37
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA


A client of mine keeps telling me that he will sell his house for such and such a price.  Of course, the price in way too high.

Jun 23, 2012 04:13 PM #38
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

We see it a lot with short sales these days~ and I personally get it.

Yet,  i do not think a pocket listing serves a standard client well~~ since there is no competition for the listing( well, sometimes agent protected if it is his/her expired listing).

In today's sellers' market the seller needs to be aware of the fact that they may not be getting the best price for their home.

Dec 03, 2012 06:34 AM #39
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired


Yes, the ideal is to have the listing public, for the best exposure in the shortest time.  But occasionally, particularly when dealing with luminaries and celebrities, they insist on anonymity and discretion.  Ultimately we must comply with our clients’ requests.

Two-edged sword, definitely.

Thanks for your comment!  How did you find such an old blog?

Dec 03, 2012 07:10 AM #40
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • Green • GRI • HAFA • PSC Los Angeles CA

True, pocket listings are now 'the hot topic'', that's why i was looking what ARers think on it:)

Here in CA, there is a huge debate about pocket listings, there is a webinar C.A.R. offers:

Apr 26, 2013 12:07 PM #41
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