If you are a serious qualified buyer and you can’t find a seller or what you’re looking for posted on the internet, or in the local real estate agents window then you need to ask around about any “pocket listing” in your preferred neighborhood.
“Pocket Listings” are not included on the multiple listing services, where realtors can tap into other agent’s buyers and these properties are not openly advertised. Instead it is marketed directly by the agent or broker – “it is in that person’s pocket”. The seller keeps control about who knows the home is for sale, who may view it and ultimately who may buy it.
REASONS WHY A HOME MAY BE A POCKET LISTING:
- Seller may be a high profile person who does not want nosey tire kickers wasting their time.
- Seller may want privacy due to divorce proceedings.
- Seller may have previously listed the property and it didn’t sell. They feel that listing at the present time is a hassle and they just can’t cope with the rigmarole of listing, open houses and disappointments.
- Seller feels that agents will charge at the end of the listing term regardless of whether the property sells. With a pocket listing the agent or broker will have to work and get the place sold and earn their guaranteed broker percentage.
- Seller bought the property for top dollar before the 2006 – 2008 property bubble burst and has come to realize that to get the place sold a realistic selling price may be less than he paid.
- Seller may be embarrassed selling at a loss.
- Seller wants to avoid a posse of neighbors who may accuse him / her for selling too cheap and for driving down prices.
- Sellers who are not high profile people, like movie stars, who go down this route are generally not so motivated to sell and may want to seek a “make me move” offer at a good price without the expenses and risks associated with listing on the MLS.
A pocket listing can heighten interest by giving an illusion of exclusivity that may stimulate some buyers to start bidding higher than asking prices. This kind of arrangement is not new for luxury houses costing millions of dollars but now even $200,000 house sellers may be enticed by a 3% - 4% broker commission to get their place sold. FSBO’s (for sale by owners) often fall back onto a broker deal as 80% of FSBO’s fail to sell at a desired price. It is more likely that folks selling in this lower price range will have been courted by agents and brokers rather than being the instigator of the arrangement.