October 5, 2016
By David Saba
Did you realize that not every home for sale is listed on the Multiple Listing Service or is searchable via the internet? When you look for your next home, wouldn't you like to know that you are privy to every single home on the market? Believe it or not, there are some sellers who prefer to not have their home listed on the MLS or advertised. These sellers have chosen to list their home exclusively with a real estate agent and depend on that agent's contacts in order to get the home sold. These are called pocket listings.
So, how can you as a real estate buyer find such pocket listings?
You need to find an agent with connections. A real estate agent who is active in the real estate industry and networks with many other real estate professionals will either have a pocket listing or know of a pocket listing that might be the perfect home for you.
First, as you decide what area you want to buy a home in, ask for referrals of real estate agents who are experts in that area. Area specialists (also called neighborhood specialists) are considered to be the real estate professionals with the expertise for selling in that given area. So, when a seller is for whatever reason wary of placing the home on the open market, a seller is more likely to contact an area specialist to list the property for sale.
For example, buyers looking in the South Maui area for a condo work with an area specialist. They ask the agent to show them his listing in the Na Hale O Makena condominiums. Little do the buyers know that the agent also has two pocket listings at the Makena condo complex - two units they otherwise would not know of.
When looking for an area specialist, speak with a couple of real estate professionals on the phone. Ask them questions such as:
Don't forget to ask area-specific questions. A buyer looking in South Maui might ask:
Once you've found an experienced real estate agent with pocket listings, or the ability to network with those agents with pocket listings, then you've hit the jackpot! Think about it: any person browsing the internet will know about that Makena condominium off Old Makena Road. And it's a beautiful property. But the other buyers out there not currently working with a real estate professional, or working with one who is unconnected and not an area expert will not know about the other little treasures for sale in the same condo complex.
Don't assume that a pocket listing is something to be concerned about. While many sellers want every single person possible to know about the sale of their home, just as many sellers are interested in obtaining an exclusive agreement with a real estate professional for a variety of reasons. Perhaps the seller doesn't want family or friends to know of the sale. Perhaps the seller doesn't want to freak out his neighbors if he's priced his home somewhat low for some reason. Another seller may just have a need for comfort and security, knowing that the home will only be opened up to a select few who are truly in the position of buying the home, as opposed to being available to the masses and anyone with a lockbox key. There are many reasons why a pocket listing may exist and many of those reasons are very understandable.
By opening yourself up to pocket listings and working with an area expert, you are given an opportunity to view a home others don't even know is available. You are given the gift of time in terms of making an offer and hammering out a great deal with the sellers. You are immediately placed in a better position as a buyer, and that's a good place to be!
Pocket listings are lists of properties that are not currently listed on the open market, but which may be available under the right circumstances. In some cases, owners have expressed a willingness to sell under very limited conditions - most commonly that a specified price is met and that the process be handled discretely, with no public notice of its' being available.
Some 50 years ago, songwriter Malvina Reynolds wrote the song "Little Boxes". Her song was inspired by driving past rows and rows of "cookie cutter" houses. It includes these words:
"Little boxes on the hillside, Little boxes all the same. There's a green one and a pink one And a blue one and a yellow one, And they're all made out of ticky tacky And they all look just the same."
If you have one of those little boxes for sale, pocket listings WILL NOT help you! Such properties are most likely to sell, and to command the best price by receiving maximum exposure through conventional MLS (Multiple Listing Service) listings.
On the other hand, if you own one or more blocks of those houses, and you'd like to sell the entire lot, a pocket listing may be perfect for you. The process of pocket listings allows you to discretely offer your property without the hassles that sometimes accompany conventional listings.
Others who may prefer pocket listings include owners of exotic or exclusive properties, celebrities, and individuals who need / desire privacy or security. Property owners who fit in any of those categories will definitely benefit from the confidentiality of discrete listings. Indeed, probably the majority of celebrity homes are sold "off market" to avoid the hassle of having them trampled by hordes of sightseers. The same is true of exclusive properties such as unique designer homes, historic structures, and extremely valuable mansions.
Real estate agents may choose to use the pocket listing approach to discretely share leads with trusted peers about special properties, or about potential buyers who have very specific interests - but such sharing should be done with extreme caution. Unless you have a binding contract, you could end up donating your lead to a competitor!
If you are wondering whether you want to sell, consider posting your property on AssetColumn. Posting your property on AssetColumn will enable you to put your property in front of thousands of serious investors without locking yourself into an extended contract with a real estate agent. You may actually sell it yourself, or at least the experience will help you to decide for certain what you want to do. Pocket listings are not for everyone, but they offer a valuable service to select owners and agents.
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