Serious silent professional keeping secret. Young black business woman standing at outdoor glass … [+]
Typically, when a home is listed for sale, the listing agent will advertise it on the multiple listing service – or MLS – in order to encourage potential buyers to come take a look. The same cannot be said for a pocket listing.
If you’ve heard the term “pocket listing” and are curious to know more about how they work, keep reading. I’ve explained what a pocket listing is, as well as the potential advantages and disadvantages of using this method to sell your home.
What is a pocket listing?
In the world of real estate, “ pocket listing” is a slang term for any listing that’s not actively being advertised in the area’s multiple listing service (MLS). These properties are also sometimes referred to as “off-market” listings because they are not being marketed in the same way as a traditional listing.
It’s important to note that a pocket listing, or off-market listing, is not the same as a For Sale By Owner (FSBO) property. In this case, the sellers are still working with a listing agent, they simply want their property to be marketed in a different manner.
What are the benefits of listing your home off-market?
- Increased privacy: The biggest benefit to off-market listings is increased privacy for both the buyer and the seller. Since the home is not being listed on the MLS, only the parties involved have to know that the home is even on the market.
- Ability to test the market: Publishing multiple price changes on the MLS can potentially stigmatize a listing. However, if the listing is not being publicly marketed, it gives the sellers the opportunity to experiment with different price points without repercussions.
- Reduced fees: Since they likely won’t have to spend money on staging or professional photography in order to market the property, some agents may be willing to take a reduced commission on a pocket listing.
What are the downsides to listing your home off-market
- Typically only one agent: Where pocket listings are concerned, the listing agent is typically in charge of finding a buyer for the property. Once a buyer is found, the same agent may end up facilitating both sides of the transaction. While that can be done, many sellers prefer to work with an agent who solely has their interests in mind.
- Less traffic: The biggest downside to a pocket listing is that there is going to be less traffic, meaning less opportunity for the home to receive multiple offers or to become the center of a bidding war.