What Are the Pros and Cons of a Pocket Listing?

Whether you’re thinking of selling a home or actively looking to buy one, pocket listings are always something to keep in mind. Of course, in order to successfully market your home as a pocket listing or purchase a pocket listing before it hits MLS, you’ll need a top-notch realtor to streamline the buying and selling process. Here’s everything you need to know about a pocket listing.

So what is a pocket listing?

So what makes a pocket listing different from your typical real estate listing? In a typical listing sellers will hire a listing agent to officially market and list their home on the MLS (multiple listing service) database. This database reaches a large pool of buyers and lets the public know that the home is officially “for sale.” However, with a pocket listing, sellers won’t place their home on MLS or anywhere else online. Instead, homeowners will let their realtor know that they want to sell their home but do not wish to list it publicly. In turn, the listing agent will only share the listing with select agents who represent qualified buyers, and/or they will share the listing with potential buyers themselves.

Why do sellers choose to list their home as a pocket listing?

There are many reasons why sellers opt for a pocket listing over a typical MLS public listing. Reasons may include:

They’re thinking of selling the home (but haven’t fully decided) – If the homeowners are thinking about selling their home but not quite ready to commit to putting it on the open market, they’ll likely opt for a pocket listing. In other words, they’ll let their realtor know that they’re open to the idea, if the right buyer comes along.
They want a certain price – If the homeowner isn’t willing to negotiate the price and isn’t set on moving, then they may opt for a pocket listing over a typical listing. This will allow them to test the market to see what buyers are willing to pay. In this instance, their realtor would only seek out and vet buyers who have the financial resources to purchase the home.
They value their privacy – From listing photos of your home to having strangers tour your house on a daily basis, living in a “for sale” home is never fun. Those who value their privacy may opt for a pocket listing over a typical listing, simply because they do not want hordes of strangers inside their home.

What are the pros of a pocket listing?

Pros for the seller

They get to maintain their privacy – Since there won’t be photos of the home on the internet or random strangers perusing the hallways, owners will be able to maintain their privacy when opting for a pocket listing.
They may have the upper-hand in price negotiations – If they aren’t desperate to sell their house, the buyer will likely have to meet their asking price.
The home doesn’t have to sit on MLS – It’s usually a red flag when a home sits on the market too long. If the home has been on MLS for awhile, many buyers won’t even bother looking at it because they assume there must be something wrong. Opting for a pocket listing prevents this from happening.

Pros for the buyer

Competition won’t be as fierce – When buyers look at a pocket listing, there’s usually little worry that it will sell out from under them or spark a bidding war. In fact, they may be the only ones who have seen the home.
Possibility of buying the home for a below market price – Less competition for the home means the buyer may be able to purchase the home for less money than if it were on the open market. Of course, if the homeowners aren’t set on selling, it’s also likely there won’t be much room for price negotiation.
The home buying process may be more flexible – Since sellers are willing to sell their home in a non-traditional way, they may also be more flexible with move-out dates, furniture negotiations and more. To get a sense of the seller’s flexibility, be sure to ask your Realtor for guidance during the homebuying process.

What are the cons of a pocket listing?

Overall, there are only several cons to selling or buying a pocket listing. Cons may include:

Cons for the seller

Less buyers vying for the home –The biggest con for the seller is that less exposure means that less people will have a shot at making an offer on the home. Of course, the less competition or bids there are for the home, the less money the seller will make (most likely, anyway).
It may take more time to sell the home –Since the home isn’t on the open market, the seller may have to wait a longer time to find a buyer willing to pay their asking price.

Cons for the buyer

Less wiggle room on the price – While some pocket listing sellers will certainly be willing to settle for a lower price (in order to save them from the hassle of having to list their home), many won’t sell until they get their asking price. These sellers are typically just testing the market to see what they can get. However, potential buyers will find this challenging, as these sellers may not be willing to negotiate the price.
Lack of photos and marketing information – Since the home isn’t officially listed on MLS, buyers will likely need to see it in-person and take their own photos of the home. They also won’t be able to go back and look at listing photos after the showing, if the pocket listing information isn’t available online.

Finding the right realtor to help you with a pocket listing

Whether you’re a buyer who’s interested in learning about nearby pocket listings or a seller looking to find a buyer under-the-radar, one thing’s for sure: you’re going to need a top-notch realtor to handle the job. Here are few tips for finding a real estate agent who can assist with pocket listings:

Ask for recommendations from friends, family and neighbors in your town.
Research the realtor before interviewing them for the job. Make sure they’re connected and involved in your community. Check their past/present listings and selling history to get a sense of their experience and qualifications.
Interview them prior to hiring them as a listing agent or buyer’s agent. If you are the buyer, I recommend asking them directly whether or not they know of any pocket listings or homes that are about to go on the market in the neighborhood of your choice. If you are the seller, ask about their connections to other agents and potential buyers who meet your qualifications.

For more information on choosing the right realtor for the job, check here.

Ready to move?

You’ve sold or bought a pocket listing, and now you’re ready to move. Congrats! To find a reliable moving company, check Moving.com’s extensive network of movers. Our website makes it easy to find and book the best moving company for the job. All relocation companies in our network are licensed and insured, so you can rest assured that your move will be in good hands.