The Secret To Finding Pocket Listings: Never Miss A Great Off-Market Property
Miranda Crace3-Minute Read
April 14, 2021
It could be a specific house, like that colonial you walk your dog by every day. You’ve had your eye on it, and have even said, “If that house ever went up for sale, I’d pounce.”
Or maybe you’re an active home buyer looking in a certain neighborhood and have been to every open house that’s held, yet still haven’t found something appealing.
But then one day you notice something distressing – a “Sold” sign in the front yard of a house you wish was yours. Wait a minute, you think. There was never even a “For Sale” sign. What gives?
This phenomenon happens all the time. It’s called a “pocket listing,” explains Maya Madison of Keller Williams Realty in Metairie, Louisiana. It’s a house that’s sold off-market, before it ever officially gets listed.
Here is all the insider scoop on why some homes never actually go up for sale – and how you can get in on the action to become the lucky owner of that house.
What Are Pocket Listings?
A pocket listing, also known as an off-market listing, is a real estate agreement in which the home or property never makes it to a Multiple Listing System (MLS). Rather, the real estate is shown to buyers through the seller or agent’s own private network.
Reasons Properties Are Sold Off-Market
Wait a minute. Aren’t you in a better position if everyone is coming through your house to check it out? Well, yes, but that’s not for everyone. People who might be interested in an off-market listing could be celebrities who want to keep their identities under wraps, says Madison.
Or they might just be normal folks testing the market because they’re not quite ready to pull the trigger and list the home yet – but they’re willing to hear an offer.
Benefits To The Seller Of A Pocket Listing
The benefit to a seller is that if someone does buy their house before it’s officially listed, they likely won’t have to go through all the hassle of repairing a roof, sprucing up landscaping or staging the interior, as the would-be buyer typically agrees to buy it in its current condition.
And of course, they can skip the often-onerous step of multiple showings and open houses that can attract a parade of people interested in looking but not actually buying.
Benefits To The Buyer Of A Pocket Listing
Buying a home off-market has a very distinct benefit as well: less competition. With fewer people aware that the house is even for sale, you’ll have a much better chance of your offer being accepted. This can make for a much less stressful situation and, ultimately, a better deal.
Are Pocket Listings Only For The Rich And Famous?
Contrary to popular belief, pocket listings can be a fitting option for anyone – not just the rich and famous hoping to avoid paparazzi or gawking fans. The main reason many celebrities opt for pocket listings, however, has to do with the privacy it offers.
Whether you simply don’t like the idea of posting videos or photos of your home online, or the thought of having strangers roaming around during an open house makes you uncomfortable, a pocket listing can bypass these norms in the home buying process.
Pocket listings are also a great option in cases where the seller has a particular buyer in mind – whether it be a family member, friend or interested neighbor. With a pocket listing, the seller can avoid the hassle and time it takes to list on an MLS and instead sell directly to their buyer.
The National Association of REALTORS’® (NAR) Pocket Listing Ban: What It Means For People Searching For Unlisted Property
The National Association of Realtors’® ban on pocket listings – put in place after a 729-70 majority vote on November 11, 2019 – officially prohibited pocket or exclusive listings. 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.”
While pocket listings weren’t an inherently illegal practice – a common misconception – they were a tool frequently used by ethically murky real estate agents to gain a better commission at the expense of their client. This reputation paired with many buyers feeling constricted by an unjust and competitive market eventually led to the ban.
So, what does this mean going forward?
This ban means buyers may only have 24 hours to secure a deal before it’s officially on the market and you’re competing with other interested home buyers. So, if your neighbor has a “coming soon” property, don’t wait to make an offer if you’re sure you love it.
Enlisting the help of an in-the-loop and local real estate agent can also be an immense help in finding homes in a timely fashion.
The ‘Coming Soon’ Workaround
However, the NAR’s pocket listing ban doesn’t write off pocket listings altogether. Real estate agents can use the window of time in which a property can be listed as “coming soon” to make an off-market sale – all while still complying within the guidelines set by the ban.
So if there’s an off-market property you’re head-over-heels for or you want to close a sale, find yourself a trusted real estate agent to help guide you through the tricky process.
How To Find Off-Market Homes For Sale
If you want to find properties before they ever hit the market, you have a few options.
Find A Well-Connected Agent Who Will Get Word Of Pocket Listings
The key is to have a well-connected real estate agent, says Amber Harris of Keller Williams Capital Properties in Washington, D.C. “A good agent will have an extensive network that he or she can call upon when searching for the right fit for a client, especially in markets where inventory is low,” she explains.
Experienced In A Specific Community
Harris says she often reaches out to other agents whom she knows are hyper-focused on a specific community that interests one of her clients, adding, “It is not uncommon for them to know someone who may be flirting with selling and may reevaluate their decision and timeline if an offer is presented, or they may have a listing that they are preparing for market and be open to considering an offer before it’s officially listed.”
From A Larger Office
An agent from a larger office with a potential seller might reach out to his or her fellow agents to let them know. In many markets, there is also a private listserv called Top Agent Network that agents join by invitation only, explains Kristina McCann, a broker associate with Better Homes and Gardens Real Estate Highland Partners in Piedmont, California.
With A Good Reputation
Or maybe your agent just has a good rep. “If listing agents perceive a fellow agent as being professional and easy to work with, they are more likely to share a private or ‘coming soon’ listing because they know you will not waste their time,” says Paul G. Lykins, broker associate with True Floridian Realty in Delray Beach, Florida.
Who Will Reach Out to Homeowners Directly
Another tactic that agents will use to help their buyers is reaching out to homeowners directly, even if they haven’t indicated a desire to move. “Perhaps they have never considered selling or have only half-considered the idea but may be open to entertaining an offer,” Harris says. In this way, a knowledgeable and persuasive agent can create a brand-new pocket listing, just for you. Of course, a determined would-be buyer can “door-knock” themselves, but it’s often better received coming from an agent.
Keep An Ear To The Ground And Ask Around
Besides finding an agent who specializes in your market, it can’t hurt, as a potential home buyer, to ask around and let others know you’re interested. Friends may hear of someone who’s moving out of state who might be delighted to entertain an offer without going through the hassle of getting their house officially primed for listing.
You can always conduct your own online search, too. There are sites that feature off-market listings, and online marketplaces like Craigslist often feature for sale by owner homes. Keep in mind, though, that if you’ve found off-market houses online, countless others have likely found these same homes.
Final Thoughts On Off-Market Properties And Pocket Listings
While home buyers shouldn’t hold out hope for an off-market property as the answer to their house hunt, it can be one more avenue to pursue as you search for the home of your dreams. The first step? Make sure you’re ready to make a solid offer by getting your mortgage prequalification all lined up in advance.
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