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Pocket Listing Kills the Sale

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Real Estate Agent with Value Added Service, 602-620-2699 SA5376460000

This past week has been a royal circus.  Scottsdale homes under $400,000 are selling quickly if they are clean, updated, and in good locations.  The ones that sell the fastest are priced right and the glossy pictures are a testament to the effort engaged from the get-go by the listing agent. A good listing agent knows how to read between the lines and interpret a buyers' contract as it benefits a seller.  

 

Being engaged as a listing agent means understanding the current market and accurately pricing homes according to their condition so that homes sell faster and for more money.  Homes that are over-priced tend to sit on the market longer.  But what if the home isn't listed for sale in a hot buyers market? 

 

 If a buyer offers a contract and his home isn't on the market, how does a buyer expect his offer to be accepted in a hot sellers market?  The buyer is disadvantaged in the buying process if his home isn't listed for sale.  A seller will surely seek an offer that does not have such a contingency.  There is no guarantee how fast a home will sell if it isn't on the market and a seller is less than reassured if their are no current photos or information as would be displayed on a MLS listing service.  

 

Not only will his offer not be accepted, the entire scenario reflects poorly on the listing agent.  And especially if the listing agent has kept the home as a "pocket listing" rather than offer the home to the public via the local MLS. 

 

Wading through the weeds in a contract and counseling a seller properly also includes presenting every offer.  Every offer is reviewed for accuracy so the best decision can be made as to which offer to accept.  Offers that have the least favorable terms will be bypassed.  The offer price may not be the winning offer if the terms of the offer aren't favorable toward the seller.  

 

If you're a buyer in today's housing market be aware that communication is VERY important in the sales process.  An agent needs to communicate by phoning the listing agent to learn of other offers, status of the sellers position, and when and how a seller might make a decision with regards to multiple offers.  Neglecting said communication might cost you a purchase that you could have won.

 

In this case, the pocket listing of a potential buyer who is writing an offer on one of my  listings will not be accepted.   

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Show All Comments Sort:
Doug Dawes
Keller Williams Evolution - 447 Boston Street, Suite #5, Topsfield, MA - Topsfield, MA
Your Personal Realtor®

Hi Jan Green 

Just the term pocket listing frustrates me. I also don't like "Coming Soon" signs and ads. I have seen too many use that as a backdoor to a pocket listing

Feb 05, 2017 12:47 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Agreed !  It sounds selfish that the pocket listing even exists. If it isn't ready to sell, that's one thing but expecting my seller to accept it in a hot market with 4 other offers pending, well that's kinda silly! 

Feb 05, 2017 12:55 PM
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Jan - We seen buyers try contingent offers several times on our listings in the very hot seller's market, and it's always a deal killer. A pocket listing would raise more questions and have less chance.

Feb 05, 2017 01:29 PM
Chris Ann Cleland
Long and Foster Real Estate - Gainesville, VA
Associate Broker, Bristow, VA

I can't even fathom a scenario where I would have a buyer, who was also a seller, whose listing I was holding as a pocket listing WHILE the buyer was making offers.   And honestly, the idea of pocket listings makes no sense to me in any scenario.

Feb 05, 2017 01:59 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

You are so right Dick Greenberg !  It makes me wonder about the motivation of the buyer for having a listing agreement dated 1/30/17 and making an offer on my listing 2/4?  In a hot market like we have here, it just doesn't make sense and my seller will not entertain that kind of offer. 

Exactly Chris Ann Cleland ! I was mystified when I saw the contingent offer and realized it wasn't even on the market.  In a different price point, maybe, but not at $290,000?!!

Feb 05, 2017 02:44 PM
William Feela
WHISPERING PINES REALTY - North Branch, MN
Realtor, Whispering Pines Realty 651-674-5999 No.

These listings are not leagal in Minnesota.  After the contract is signed you have 3 days to get it on the MLS and no pre-advertising.

Feb 05, 2017 03:15 PM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

Jan, we are seeing early multiple offers received here as well.  What are they thinking to write an offer that will be contingent, but has not listed yet.   Just plain silly.

Feb 05, 2017 03:40 PM
Myrl Jeffcoat
Sacramento, CA
Greater Sacramento Realtor - Retired

It is my belief that in many instances a pocket listing does not meet the best outcome for a seller.  After all, the home isn't being offered to a broader market where it would be exposed to a broader market, where a better offer may prevail.

Feb 05, 2017 04:57 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you for commenting William Feela . I'm curious about our timing for signing listing docs vs. putting a home on the MLS.  Clearly there are guidelines for putting a home on the MLS, so I just sent my broker an email for clarification.  I think our time line is similar, so this agent is breaking the rules! 

You're so right  Joan Cox ! 

I think sellers are misguided in thinking an agent can sell it herself and charge less commission, netting the seller more $ Myrl Jeffcoat !  These were investors so she's trying to help them, but she wasn't helping them by writing an offer like this.  You are so right!  The home is not on the MLS and in todays hot sellers market for that price range it doesn't make sense.

Feb 06, 2017 08:42 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

That is and has been one of the questions I always ask, is the home on the market with an agent? Even the lisitng agent matters in tight and close encounters.

Feb 07, 2017 06:19 AM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

You are so right Debbie Reynolds !  The buyers agent was also the pocket listing agent.  She shared her listing agreement with me, which didn't help.  Because they were seeking a buyer without paying a buyers agent to make more money.  There was plenty of money to be made but they didn't win this home.  We chose another offer that is non-contingent and financed.  

Feb 07, 2017 08:05 AM
Patricia Feager, ABR,CRS,GRI,MRP
DFW FINE PROPERTIES - Flower Mound, TX
Selling Homes Changing Lives

Jan Green - You're exactly the type of Broker  I would appreciate doing business with! When it comes to selling houses, I don't play games and neither do my buyers. 

Feb 22, 2017 02:39 PM
Jan Green - Scottsdale, AZ
Value Added Service, 602-620-2699 - Scottsdale, AZ
HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN

Thank you Patricia Feager !  No sense in wasting anyone's time and we must work for our sellers and buyers effectively.  Would be great to do a transaction with you.  Have a great rest of your day!

Feb 22, 2017 02:59 PM