I was recently on a listing appointment when the seller asked me, “Do I have to go on the multiple listing?” I was a bit surprised by this and asked my elderly seller, why they wouldn’t want to go on the public market place when that’s where they get the greatest exposure and likely result, the best price? Her answer was very telling. She said she didn’t want to go on the MLS because she didn’t want a bunch of people going through her home. Interesting right? I mean how the heck does one sell one’s home without being “On the market?”
Studies suggest that the 3 most stressful things in life are death, divorce and moving and not necessarily in that order. What my client was saying in the example above was that she just wanted her home sold and didn’t want to go through the process of selling. (Ask Tim about your home here) But is that even possible and more importantly, if it is possible, is it realistic and even if realistic, will I be doing right by the seller if I do the listing in this way? The answer is yes.
When a home doesn’t go on the MLS but is an active listing (listing agreement has been signed) it’s called a pocket listing. A pocket listing is where an agent and seller sign listing papers but intentionally agree to not go on the multiple listing service. To keep it, “In the Realtor’s pocket.” In my MLS rules, a broker must publish a new listing within 48 hours of signing or else have the seller sign an exclude from the MLS document. Pocket listings are frowned upon by the Association of Realtors. Why? The reason for the tight timeline and the exclude document is that in years past an unscrupulous agent might tell a client that they are on the market when in fact they are not. The reason this evil agent might do this is obvious: to sell to their own buyer their listing earning both commissions for themselves. Obviously if no one knows about the listing, the listing agent has a much better chance of selling it themselves, right? A quick aside: Dual Agency is allowed in California provided both parties are fully aware of the dual agency relationship. When only one side knows of the relationship, this is called a Divided Agency and it’s illegal and the quickest way for an agent to lose their license.
In our story, my elderly client just wanted her home sold. She’d been in the home nearly 60 years and the whole thing was entirely overwhelming. Being a SRES, a Senior Real Estate Specialist (click here for more on what a SRES is or contact me for more information) I am acutely aware of the difficulty our seniors face when finally making the difficult decision to move. Clearly this was the case with my client. The question then moved from “Yes, I can do a pocket only listing,” to “How am I going to do this?” It’s interesting really. Pocket listings aren’t the least bit uncommon in the ultra-luxury market. Often times a home is sold in a “Private sale” and only becomes known through public records and from scuttlebutt as people hear about a big sale and word gets out. Let’s face it, there are only so many people in the world that can spend $50M+ on a home therefore being on the MLS is not always required. But in the more moderate price ranges it is quite challenging to sell a pocket listing. So how would I do it?
Faced with this task I told my client that I’d first market to select Realtors that I knew worked in the neighborhood. Since I have a frequently visited website (www.1000oaksrealestate.com) I would add the listing as a Featured Home to my website as well as include it some of my mailers and marketing pieces in a way to inform my circle of friends and past clients of this great pocket listing all the while without giving up the address. There would be no sign of course and I explained it was likely to take more time than a normal listing. As someone who lists a lot of homes, I have the advantage that people call me for information on my listings. This allows me to tell people inquiring about one home for sale, that I had this other pocket listing too. All of this pleased my client, but I bet you’re wondering, will it work?
I put my plan into action in late fall. I showed the home a couple of times using word of mouth but to no avail. Then I included it in my bi annual newsletter, The County Line Gazette (Click here to receive your copy of the County Line Gazette). Low and behold I got a call from a Realtor. Understand that I don’t send my newsletter to other Realtors but that’s who called. “How’d you hear about it?” I ask. “My client’s parents got something in the mail from you and knew their kids wanted a home like this so they’d called me,” the Realtor said. Cool! Perfect! This is exactly what we wanted. I showed it and guess what? That’s right, they wrote an offer. You can imagine how pleased the seller was. She really didn’t’ think I’d sell it and then when I got her a good price without having to have “People go through her home,” she was thrilled.
Another time a pocket listing is a good idea is when the seller is only somewhat interested in selling. In this scenario, a seller might engage a Realtor by saying something like, “If you have someone who’d be interested in my home, I’d be willing to sell if the offer made sense and the price was right.” Often this is the seller whose not terribly motivated and doesn’t want an agent to spend a bunch of time and money marketing their home when they really aren’t sure they want to sell or someone who doesn’t want the task of always keeping their home “Show ready.” As an agent who does pocket listings, I don’t love this kind because working for a unmotivated seller isn’t what I like to do. It’s typically a waste of time. Still, it can work and is especially useful when working with an agent who is very active in a certain neighborhood where the likelihood that they might have interested buyers, is better.
A pocket listing isn’t usually the best way for a seller to sell but it has its place and can be used effectively in the right situation. And sometimes, it’s is just what the doctor ordered.
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