What is a Pocket Listing in Real Estate

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  • What is a Pocket Listing in Real Estate

A pocket listing is a property for sale that is not advertised on the open market. Agents typically share these listings privately with select clients or within their own network.

The term “pocket” stems from the notion that the listing is kept in the agent’s “pocket” rather than being widely shared.

We think that pocket listings should be a thing of the past. Information wants to be free. That’s kind of the whole point of the internet. Stop all the closed door private information stuff.

Pocket listings are a unique and somewhat controversial concept. They’re basically known as private, off-market listings. These properties are not publicly advertised on the MLS (multiple listing service) to be syndicated to sites like Zillow, Realtors.com and Redfin.

The Limited Benefits to Sellers

Look, if it’s some big time Hollywood executive with a $50,000,000 house that almost no one can afford and they only want Saudi princes to come to their open house then fine, go for it. But we can’t think of any other reason why it would make sense.

And even the billionaire home owner wants the world to know about their grand estate for sale.

The primary disadvantage for sellers is the limited market exposure, which can potentially lead to a lower selling price.

Contrary to popular belief, pocket listings rarely benefit the seller and are generally not recommended in the industry.

Put simply, you want as many people to know about an asset for sale. This drums up demand and creates a market. The more exposure, the better. It’s common sense actually.

picture of scolding lady

The Industry’s Stance

The real estate industry, specifically the National Association of Realtors, largely frowns upon pocket listings due to their restrictive nature. They are viewed as limiting both the exposure of the property and the potential for the seller to receive the best possible offer.

This perspective is supported by various real estate associations and regulatory bodies, advocating for more transparent and fair practices in property sales.

The Impact on Home Buyers

For home buyers, especially those relying on a realtor to uncover hidden gems, pocket listings present a challenge. It’s crucial for buyers to understand that these private deals are rare and not a typical part of the house-hunting process.

Relying solely on a realtor to find such listings might result in missed opportunities in the broader, public market.

Again, your expectation shouldn’t be that your realtor is going to come up on some hush-hush exclusive listing that nobody knows about and you’re going to get the deal of a lifetime.

Navigating the Market

For both sellers and buyers, the key is to work with a trusted, ethical real estate professional who understands the nuances of the market.

Sellers should carefully consider whether a pocket listing truly serves their best interests, and buyers should focus on the wide range of publicly available properties to find their ideal home.

While pocket listings hold a certain allure due to their exclusivity, they generally do not serve the best interest of the seller and are increasingly discouraged in the real estate industry.

For a successful real estate transaction, transparency, wide exposure, and ethical practices remain paramount. When information is free, we all win.