The Secret To Finding Pocket Listings: Never Miss A Great Off-Market Property
Miranda Crace3-Minute Read
November 24, 2021
It’s the ultimate inside scoop of the real estate world – the pocket listing. Have you ever noticed a home in your neighborhood or the neighborhood of your dreams that sold without even planting a giant for sale sign in the front yard? Without the parade of people in and out for an open house? If so, you might be asking, “how in the world did that happen?”
The elusive pocket listing is a house that is sold off-market, before it’s officially listed. The next question (as a buyer or seller) is “how do I do that?”
A pocket listing is easier to navigate than you might think, and next time around you can be the one with the inside scoop with these tips and information on pocket listings.
What Is A Pocket Listing?
A pocket listing, also known as an “off-market listing,” all comes down to word of mouth or private listing networks. This occurs when a listing agent sells a home through their connections with other real estate agents and private listing service, rather than on the open market or through listings in the multiple listing service (MLS). A pocket listing is a real estate agreement that allows possible buyers to see and purchase a home before it ever goes on the market. A pocket listing is also not marketed the way a traditional listing is - therefore there is no staging or professional photographs to scroll through online.
According to MLS, as many as 10 – 15% of homes offered for sale today are off-MLS listings.
Pros And Cons Of Pocket Listings
While pocket listings seem like a dream, there are both benefits and drawbacks of using this method in real estate. It’s important to note all aspects of an off market listing and see which one outweighs the other in your book. Your outlook on pocket listings also depends on if you are a buyer or seller.
For The Buyer
When buying a home off-market one thing is clear, there’s less competition and you don’t have to anticipate anyone coming in and putting your offer to shame. The fewer people who know about the home, the better for you and your offer. This takes the stress out of buying a home.
Here are more benefits:
- There is a greater chance of your offer being accepted
- Less stress with the home buying process
- Closing may happen sooner
- There is more privacy to a pocket listing
There are disadvantages as well:
- In many cases, the listing agent is working with the seller by listing the house and helping the buyer – creating a dual agency situation
- Some states have made dual agency transactions illegal
For The Seller
As a seller, if you decide to go this route you will need to consider the pros and cons of listing your home off market.
- There is less traffic through your home and no worries about having to leave your home at any moment for an open house
- You won’t have to go through the hassle of sprucing up your landscaping, repairing your roof, or staging - buyers will proceed with the home as-is
- No staging or professional photos keeps more money in your pocket
- Your potential buyer means business, and not the lookie-loos that open houses bring in
- There is more privacy and nobody will know the house was for sale until the moving trucks show up
- Without an official listing, buyers can get a feel for listing price and can make changes without the negative impact of announcing it on an MLS
- Less traffic when a home is for sale means less opportunity for more offers to come in and the likelihood of a bidding war is nonexistent
- As mentioned above, many pocket listings are dual agency and the same agent may be facilitating for both the buyer and seller. This may leave you wondering, “do they have my best interest in mind?”
Is Pocket Listing Banned?
While it seems you can’t go wrong with a pocket listing, The National Association of REALTORS® officially prohibits pocket or exclusive listings. This was put in place after a 729-70 majority vote on November 11, 2019.
The new regulations state that the listing broker must submit their listing to an MLS within one business day of marketing a property to the public. Previously, pocket listings were used frequently, often by unethical real estate agents, to line their pockets with a better commission without having their clients’ best interest in mind.
The ban gives buyers 24 hours to secure a deal before it’s officially on the market. This means if you see a “coming soon” sign on a property you absolutely love, don’t wait on making your move.
How Can I Find ‘Coming Soon’ Listings?
There may be a pocket listing ban from the NAR, however, don’t write off your hope of finding one. Savvy real estate agents can use the window of time as a “coming soon” property to make an off-market sale. This still complies within the guidelines of the ban. To do this, you need to find a real estate agent you trust to serve as your guide on navigating this process.
Find A Well-Connected Agent
Not only do you need to find an agent you trust, you need to find one who clearly has the connections for the inside scoop.
If there is an area that you desire to live in, find a hyper-focused agent. They should have an extensive network that they can visit and see if any of their contacts are considering selling their home. This especially comes in handy in markets where inventory is low.
An agent from a larger office will have the ability to reach out to fellow agents to get the inside scoop and let them know they have a potential buyer for a certain home or area. There is also a private listserv called Top Agent Network that agents can join by invitation only.
It also comes down to a good reputation, ask around and see if you have any glowing recommendations for a professional real estate agent who is a pleasure to work with in the area. You will also want to find a go-getter, as some agents may reach out to the homeowners of a dream home to see if they would consider selling their home for the right price.
While on the hunt for an off-market listing, you can open your laptop and do some investigative work. You can log on and find a plethora of information in an online search. You may even have luck with sites that feature off-market listings, and online marketplaces like Craigslist often feature for sale by owner homes. It’s important to note that if you’ve found off-market houses online, it’s likely that others have found them, too.
The Bottom Line: Off-Market Properties Can Be A Great Option For Buyers Looking For Hidden Gem Homes
While true pocket listings are limited, there are short periods of time where you can make an offer on a home that is coming soon. These opportunities might be your path to the house and neighborhood of your dreams.
Find a well-connected, trusted, and knowledgeable real estate agent and set the groundwork for finding the right fit for you. If you are ready to make that step, make the first move and buy with an agent.
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