Pros And Cons Of A Pocket Listing

Buyers and sellers know that their local Multiple Listing Service (MLS) is the place to go when searching for listings or information. But listing a home for sale on the MLS is not the only way to sell property. When a real estate agent has a listing and refrains from posting it on the MLS, it becomes what's known as a "pocket listing." Popular with celebrities and other owners of multimillion-dollar homes, pocket listings may be contractual or verbal.

The pros and cons of a pocket listing are noted here to help you decide if this strategy is the right way to sell your home.

Pros

• Protects seller's personal privacy.
• Selling terms and price not made public.
• Targeted marketing only to those able to afford the home.
• Lack of open houses to prepare for.
• No sales signs, flyers or literature to deal with.
• Lets buyers feel they are getting an insiders special on the home.
• Viewed by highly qualified buyers.

Cons

• Listing may be verbal with no selling terms.
• Agent may not have marketing plan.
• Less buyers reached than when listed on MLS.
• Must depend on agent to find buyer.
• Agent may not be working in seller's best interests by knowingly attempting to get both sides of sales commission.
• May not get highest possible price or know true fair market value.
• Reduced terms/price as buyer believes there is no competition.

So, are pocket listings a gimmick or a real marketing strategy? It can be both. Without a written contract detailing selling terms and commission and lack of a marketing plan, selling a pocket-listed home is a gimmick for the agent to reap all the benefits of the commission if sold. Even the National Association of Realtors objects to some of the way pocket listings are used by agents. On the flip side, a pocket listing can also be a very real marketing strategy for certain homes, but must be contractual with a sound sales strategy to reach the most buyers.