In Atlanta, there are many agents who tout “pocket listings” which, simply put, are listings that are never put on the open market. They are sold without ever being put into the Multiple Listing Service. It is said that the listing is “in the agent’s pocket” because only the agent and those she or he tells about the listing ever knows that it exists.
There are some instances when this makes sense. If both buyer and seller agree to a pocket listing for their individual purposes, or prefer the listing not be made public, then it may never go into the Multiple Listing Service. But it is important or all parties to consider carefully before taking this route.
Here are the PROS for this particular method:
- From the seller’s point of view, there are limited showings, which can be very disruptive. There are more limited numbers of people traipsing in and out of the home. There is more privacy; for when the home is listed, the pictures and price are out on the internet for all the world to see.
- From the buyer’s point of view, they are gaining access to a home that might otherwise be unavailable for them to purchase (if not listed, they might not know about it otherwise). They do not have to face competition or get into a bidding war.
The primary potential CON that both sides must consider is PRICE. The law of supply and demand tells us that when supply decreases, demand (and therefore price) goes up. If the home is not available to the open marketplace, how does the seller know that they are getting the absolute most that they could get for their home? From the buyer’s side, how do they know that they are getting a good deal, or are paying more than they should?
If the agent sells a pocket listing themselves, they will get double (or at least more than standard one half) commission.
All parties need to be AWARE of the various considerations and consider them carefully before proceeding as a “pocket listing” so as not to be caught with their pants down (forgive the pun). The Georgia Real Estate Commission prohibits keeping a “coming soon” sign up in front of a house for too long prior to listing the home in the multiple listing service, but there is no prohibition against keeping a home out of the multiple listing service, and plenty of homes get sold that way. If you are planning to participate in such a sale, however, carefully consider the pros and cons before you do!