When a house is for sale, it’s usually pretty obvious. You’ll typically drive by and see that giant, quintessential “for sale” sign posted right out front with the realtor’s contact information. Alternatively, perhaps you or your agent found a home for sale on an online listing service. Generally speaking, sellers want their announcements heard loud and clear. Why wouldn’t they, right? The goal is to make a sale, after all. However, there are some home sales known as “pocket listings” that purposefully fly a bit more under the radar. Let’s learn more about pocket listings, how they work and when they might be something to consider as a seller.
What is a pocket listing?
A pocket listing is a term used in real estate for a property that is for sale but not actively listed on a Multiple Listing Service (MLS), databases used by real estate agents to share information about properties for sale. Pocket listings are exclusive and made for homeowners who aren’t looking to market their home in the traditional way.
How does a pocket listing work?
A pocket listing begins with the seller. There are many reasons why someone may prefer a private sale. For example, the seller may be:
- A celebrity or public figure who wants privacy.
- Using the pocket listing as a soft launch to understand what kind of offers they might get before listing it to the public.
- Looking to sell their home to a specific type of buyer.
- Avoiding the hassle of bidding wars, dealing with multiple realtors and ultimately splitting commission among more people.
Do note the seller will be using a listing agent that isn’t affiliated with the National Association of Realtors (NAR), as pocket listings are against the NAR’s code of ethics. While the NAR doesn’t allow for pocket listings, these listings don’t typically go against REALTORS®, MLS or local laws and regulations. However, it is best practice to work with a listing agent that has experience with pocket listings and is aware of your state guidelines before moving forward.
Pocket sale explained
Once you meet with a listing agent, they will begin marketing your home. Although the listing isn’t posted publicly, the agent will typically approach their brokerage, private listing services, select clientele or perhaps another client who may be a good match for the property.
Pocket listings benefit the seller by giving them more control over who is involved in the transaction, and pocket sales benefit the listing agent through exclusive commission rates. However, pocket listings aren’t a common real estate practice and are not encouraged by the NAR. Private sales may affect the ability to conduct a statistically accurate market analysis and affect the perceived amount of supply on the public market.
You may hear the term quiet listing used somewhat interchangeably with the term pocket listing. Both terms are meant to represent a transaction where a home isn’t listed for sale on the market but is privately available for sale under the right circumstances.
Pocket listings are a way for sellers to market and sell their home quietly. They may be looking for more privacy, looking to understand the market before publicly listing their home or avoiding the back and forth of multiple agents and multiple offers. If you’re interested in a quiet sale or finding a pocket listing, consider speaking with a real estate agent and checking your local laws.
Pocket listing FAQs
1. How to find pocket listings
You may find a pocket listing by word of mouth or by reaching out to a real estate agent. The latter may have a pocket listing to share, the ability to contact other agents with pocket listings as well as access to private real estate networks.
2. Do pocket listings benefit buyer or seller?
Pocket listings often benefit the seller. The seller ultimately has more control over who they show their home to, how they price their home and which agents they are willing to work with. If the seller refrains from listing their home on the MLS, the buyer can’t see how the price fluctuated, as they would if the home was listed on the public market.
3. Are pocket listings legal in the U.S.?
Pocket listings are legal in the U.S.; however, they are not supported by the NAR.