According to BatchService and ResiClub Analytics, there will be approximately 1.2 million “pocket listings,” or off-market real estate sales, in the U.S. in 2024, with the majority occurring in Texas and Florida. Pocket listings are more common in some parts of the country than others, but it’s important to be familiar with pocket listings no matter where you are.
This article explains the definition of pocket listings, the pros and cons of both agents and sellers, and how to legally and ethically transact off-market. Additionally, we provide marketing ideas to promote your pocket listing.
What is pocket listing in real estate?
A pocket listing (also known as a quiet listing, off-MLS, or off-market listing) is a real estate property that is for sale but not listed on the Multiple Listing Service (MLS). Instead, properties are sold privately through a network of listing agents, direct contacts, or a proprietary platform.
Over the years, the term “pocket listing” has taken on negative connotations. This is because people sometimes think that this is just a strategy used by unscrupulous agents to double-double the trade and not offer the highest price to the seller. Unfortunately, there are cases like this, but there are valid reasons why it is in the seller’s interest to sell off-market.
Pros and cons of pocket listings for agents
Possibly both sides. Pocket listings greatly increase the chances that listing agents will sell pocket listings directly to buyers without their own agents. Depending on the terms of your contract with the seller, your fees may be higher. Reasons for calling buyers to lead. Off-market listings are a great excuse to call every potential buyer in your database. Selling pocket listings allows you to establish yourself as a successful agent who can provide buyers with valuable information that they otherwise wouldn’t have access to. More work. Not being able to leverage the reach of the MLS and all aggregator websites to promote your pocket listing means it’s up to you, the listing agent, to get the word out. We’ll explain how to do this in a later section. Yes, it’s possible, but it’s more work than traditional sales. Marketing opportunities are reduced. One of the great benefits for agents working with sellers is the great marketing opportunity that comes with each listing. Yard signs, open houses, social media content, and neighborhood door knocks are just a few of the many ways you can use it. Find more clients with MLS listings. With pocket listings, most if not all of those opportunities are lost.
Pros and cons of pocket listings for sellers
Convenience: Especially for occupied properties, it is more convenient to have fewer buyers visiting the home, which reduces the need for sellers to “show-ready” the property. privacy. Some sellers don’t want their neighbors to know they’re selling. One seller asked me to park on the street during my first appointment so the neighbors wouldn’t see my car in the driveway and ask if I was selling it. This is especially true for luxury homeowners who don’t want the insides of their homes exposed on the internet. Celebrity friendly. Selling as a pocket listing is a popular option for athletes and celebrities who want a higher level of discretion and often use an LLC instead of their own name to buy and sell real estate. health. There are typically no open houses on weekends, and pocket listings don’t have dozens of private showings, so there are fewer buyer germs invading your home. For some sellers, this is a significant concern and selling off-market may make sense. Lower selling prices (possible). There is a risk that sellers are leaving money on the table because they are not providing the maximum exposure of the property to as many buyers as possible. Typically, the more buyers view a property, the more offers a seller will receive and the higher the offer amount will be. Of course, this is not always the case, but sellers considering pocket listings should be aware of this. It takes longer to sell. Pocket listings are not published through the MLS or syndicated to top real estate websites, so they typically take longer to sell. It takes longer to get a property in front of enough buyers to find the right buyer who will offer you the right price.
How to market your pocket list
Marketing pocket listings come with a unique set of challenges compared to traditional listings. You can’t leverage syndication or broadly reach every buyer match in the MLS, so you’ll have to get creative. Here are our main ideas on how to market your pocket list:
Start with the buyers you already have. Who knows, maybe your new pocket property will match up with one of our existing buyers who has been searching for the perfect home for months. If so, great! Be sure to follow local guidelines regarding dual institutions. Pick up the phone. Yes, it’s old school. Yes, it works. And yes, I’ve done it myself. For those who are afraid to make phone calls, let me assure you that this is the easiest phone call. Other agents will be very grateful to you for letting them know about new inventory they can share with buyers, especially if they’re in a strong seller’s market with low inventory. Other agents are the most likely source for finding a buyer for your off-market listing.
pro tips
If you’re not sure what to say to a fellow agent, here’s what you can say.
“We know you do a lot of business in this town, so we wanted to let you know about an off-market listing we have: a 4-bedroom, 2.5-bathroom Colonial on Spring Street. The asking price is $850,000. Are there any buyers who might be interested?
Share your pocket list with your office. Most brokerages have a place internally to facilitate off-market listings (ours is a Facebook group just for agents). Please share with other local offices. Although it may feel a little strange, you can call or stop by another brokerage with information about your pocket listing and ask the manager/receptionist to share that information with your agent. Host a broker open house. Invite all agents to speak. This gives your listing even more exposure while being removed from the public MLS. Of course, this requires the seller’s approval and blessing. Post your pocket listing to as many local off-market agency Facebook groups as possible. I have at least 4 groups in my marketplace that list all off-market listings and all “coming soon” listings. If there is no such group on the market, create your own.
Is pocket listing legal and ethical?
Yes, it is possible if done correctly. Make sure you cover all the basics and are on the same page with the seller about all aspects of marketing. For example, make sure you don’t want to put up signs in your yard or put out postcards in your neighborhood. Every situation and seller is different, so have these conversations in advance to set expectations.
As long as you are 100% transparent with sellers about the pros and cons of pocket listings, you can rest assured that you are acting ethically. Ultimately, it is up to the seller to decide how to market the property. Just as there is nothing unethical about a seller buying a for sale sign at a hardware store and sticking it up in the yard himself, there is nothing unethical about a seller instructing you to sell their item privately. There’s nothing unethical about that either.
Although pocket listings are technically legal in all 50 states, the nuances and rules regarding pocket listings vary from state to state and MLS to MLS. Back in 2020, NAR banned pocket listings and required all listings to be registered with the MLS within 24 hours of signing a listing agreement. However, there is a workaround for sellers who really don’t want to go public.
In the Boston area, where I am based, there is a one-page document signed by the seller in addition to the listing agreement that acknowledges that the listing will not be listed on the MLS, which we refer to as a non-MLS form. I’m calling. Check with your broker to make sure you are following the law and your broker’s guidelines.
How to find your pocket list
You may be wondering how to find your pocket list. I will explain it for beginners. Pocket listings are not something you necessarily pursue as an agent. Rather, it is a useful tool or service that you can present to your sales clients depending on the situation. Other than networking with ultra-high-net-worth clients, there’s really no concrete way to target sellers who want to sell off-market. If you are already a luxury goods broker, you will likely have a disproportionate number of clients interested in pocket listings.
However, offering this path to selling your home can be an attractive conversion tool – a unique service you can offer to convert prospective sellers into customers. Pocket Listing is not meant to be a way to generate leads. Ideally, you want all your listings to get as much sunlight (and potential buyers) as possible, unless the special circumstances described in this article require a different approach.
big picture
While pocket listings aren’t the best choice for every seller and come with their own set of obstacles for agents, knowing how to talk about and market pocket listings is a helpful tool in your real estate toolbox. When you come across a seller for whom pocket listing sales make sense, you can offer this as an option.
Even if groups like local MLSs and REALTOR boards try to ban pocket listings, there will always be seller situations where a more private sale is best. I don’t see pocket listings disappearing for good anytime soon. Be transparent, do what’s right for your clients, and follow local guidelines. That’s the most important thing.
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