What is a pocket listing?
In short a pocket listing is a home that was not release to the public, but nevertheless was for sale.
The reasons that a seller would choose not to put their home on the open market and leave their home off of the MLS (Multiple Listing Service) with a REALTOR® are varied. Some sellers do not want strangers traipsing through their home. We bought our home in the Hallmark area of Belmont in just such a fashion. The seller of the home we purchased was interested in moving, but not interested in having anyone he did not know into his home due to his vast collection of Civil War memorabilia—some including one of General Sherman’s desks in the living room were quite valuable. Lucky for him we had a buyer and he was spared the discomfort of hiding all of his valuables and disrupting his life.
In other cases it might be a lack of clear motivation that keeps a seller from committing to the open market. In instances like this agents might take a listing with the seller’s caveat that “If you can find a buyer for me great, I’ll sell–otherwise I might just stay put”—it’s a form of testing the waters if you will.
Clearly marketing a home in the MLS to thousands of potential buyers offers the best opportunity to reach as large an audience as possible. Will it always net the seller the highest price? Perhaps; there’s no definitive study to prove otherwise. That said we have seen cases where the right buyer came along and paid a handsome sum to the seller in order to secure a particular home and avoid the risk of losing out to another buyer in a multiple bid situation.
How often do “Pocket Listings” occur?
The answer is probably more than you would imagine. In high-end marketplaces where the seller might be a celebrity, or where the seller feels for security reasons they’d rather sell off market it occurs quite frequently. For example, in Atherton over 20% of all homes sold last year never hit the open market.
How does one find out about these secret listings?
Your best chance at learning about pocket listing is through select REALTORS®. There are several sites that only top 10% producing agents can access where they discretely share their most treasured listings. Unless as a buyer you have been vetted by your agent and are well qualified you stand virtually no chance of viewing one of these prize properties—that would defeat the point of the seller’s confidentiality.
We would be remiss if we did not mention that selling a home off MLS is always done with full disclosure and at the seller’s request. Unless expressly requested by the seller, MLS rules state that all listings must be input into the Multiple Listing Service within 48 hours or the agent faces a fine.
Next time you see new neighbors and wonder where the last ones went, you might inquire and find out they bought another pocket listing in your neighborhood.
Drew and Christine Morgan are REALTORS® in Belmont, CA employed by RE/MAX Star-Carlmont.
The information contained in this feature is educational and intended for informational purposes only. It does not constitute real estate, tax or legal advice, nor does it substitute for advice specific to your situation. Always consult an appropriate professional familiar with your scenario.