To my great joymsn real estate ran an article today on “pocket listings”. As the inventory of homes for sale in many areas have become quite sparse, buyers and their agents have had to become creative in their search for non-listed properties.
I do often get calls from purchasers (working with and without other agents) asking if I have “anything coming up” or anything “not listed”in communities where we specialize (like Idylwood Towers, Gates of McLean, Pimmit Hills, Fountains at McLean.) My answer is always the same: “we have properties coming up for sale in those communities all the time. Please have your agent monitor those neighborhoods in the MLS/MRIS and you will know when they are available.If you do not have an agent I will be happy to set up an automatic email for you.”
“Pocket listings” are homes listed for sale with a real estate brokerage but not listed on the common Realtor listing platform that in this area is called the MRIS. The MRIS platform, with the brokers permission, can syndicate (distribute) those listings to sites throughout the Internet like Zillow, Trulia, Realtor.com, Homesdatabase etc. A pocket listing will be an agreement with a real estate agent to market and find a purchaser for a property – however, it will stipulate where and how the property will be marketed. Hence, it will typically not be listed on any of the public online site.
A pocket listing comes in many disguises. Some firms will ask sellers for an “exclusive marketing period” or “preview period” to market a home within their own firm and to “select and qualified clients.” This kind of limited marketing will rarely, if ever, be in the best interest of the client. It is however a form of dual agency and will be in the interest of the brokerage firm and/or the agent. By doing both sides of a transaction the agent and firm will increase the chance of getting both sides of the deal (buying and selling side of the transaction) and increase their profits. Some firms have extra bonuses to agents if a home sells within the firm.
A pocket listing and dual agency is legal in Virginia. A pocket listing could make sense for someone very private, someone famous or someone with a very special property. Sometimes sellers want to limit the number of people looking at their property. A seller can sell a home in whatever manner they choose. For some, money is not the #1 priority when selling their home. In the Northern Virginia area pocket listings are relatively rare in the lower price ranges.
A typical seller will be put at a monetary disadvantage by not exposing the home to as many purchasers as possible from the start. By the law of supply and a demand, a pocket listing would on average sell for less than one that was available for all to see and make an offer on. In my view a general pocket listing policy by a real estate brokerage a-la “we only allow in-brokerage sales of our listings the first 7 days” is unethical. The problem is when it is the listing brokerage that pushes for the pocket listing for their own gain – a pocket listing initiated by a client (for whatever reason) I don’t really see any issue with.
Are there times when I sell unlisted properties myself? Sure. Typically I will be representing a purchaser and I find a property not listed for sale yet and make an offer on behalf of the purchaser I represent. When I represent a purchaser my goal is to find them the best property at the best price – as long as I am honest in my dealings I have no problem with a seller getting less than they would on the open market.
The seller will always be best served and get the highest price by having the property exposed to as many potential purchasers as possible. When I represent a seller they will.
If you are looking to buy or sell and want the best possible price, please contact us!