The idea of getting your house sold without ever having to list it on the MLS for the whole world to see can be attractive to many. It’s kind of like if you found the perfect house for you by just driving around and all you had to do was knock on the door and hand the owners a check.
Sellers take a huge financial risk by choosing to sell their homes to be sold via “pocket listing” as opposed to a normal listing.
The term “pocket listing” refers to an arrangement between the homeowner and their Brokerage in which the Realtor markets the property without the use of the multiple listing service. Instead, the property is advertised through the realtor’s own network which basically means “word of mouth”.
I completely understand someone wanting to be discreet about the sale of their home especially with nosy neighbors lurking about, but not to the point where it can hurt them financially.
Sellers Should Beware Of Losing Money On A Pocket Listing
The home may sell for less than market value. If the home isn’t exposed to as many potential buyers as possible, how can a seller feel confident that they received the best sale price?… They can’t. Only homes listed on the MLS get enough exposure and have a chance to be involved in bidding wars with multiple offers.
A pocket listing, much like homes that are for sale by the owner, will never get the amount of exposure that a traditionally listed home will. An estimated 47% of homebuyers in 2013 found their home through an internet search, not through a real estate agent.
Small concerns may become big concerns. Just like in a traditional listing scenario, pocket listing sellers may have to make certain repairs or concessions in order to make the deal go through. The big difference is that in a competitive environment a seller has more options. Repair issues, as well as appraiser problems and other issues, can be negotiated or even ignored when there are multiple interested buyers.
Buyers Should Always Use A Realtor
Buyers shouldn’t even think about making an offer on a pocket listing without the proper representation of a buyer’s agent. With a pocket listing, the agent represents the seller and will put the best interest of the seller first. By using an experienced buyer’s agent in a pocket listing transaction, you can have peace of mind that the seller’s agent hasn’t overpriced the house. A buyer’s agent will also be able to help navigate an interested buyer through the contract making sure that there’s plenty of time for inspections, etc.
Buyers should also do their best to try and remove emotion from the transaction. Especially when an interested buyer approaches the homeowner directly or tells their realtor to canvas a specific area looking for homeowners that are interested in selling. By showing too much interest in a home, the buyer automatically puts themselves in a position of perceived weakness. The seller now knows that they have something that the buyer really wants.
It’s always best to let the realtors handle the communication between buyer and seller. Experienced realtors will handle everything in a professional manner leaving emotions out of the equation.
