"Palos Verdes Resident since 1947"

Pocket Listings

Whenever the market gets hot, the subject of pocket listings comes up.  A “pocket listing” is a signed listing withPocket Listing an agent who, for whatever reason, does not put that property on the general market.  The reasons might be that the seller doesn’t want hordes of people tromping thru, or that the agent would like to see if his buyer will buy it before exposing it to other agents, thus ensuring the agent of a bigger commission.  While the first reason is valid (tho not perhaps advisable), the latter can be unethical, and here’s why:

Pretty much every seller wants to get the highest price when selling their home.  Even the heirs who have inherited the family home free and clear, and who I’ve heard said shouldn’t care that much, they in fact care just as much as any other seller.  Often they’ve been counting on that money for any of a variety of reasons and it is often a major part of their inheritance.

When you don’t expose the house to the entire pool of buyers, sure you might get an offer or two, maybe even at the asking price; but who knows what you would have gotten had every buyer looking for a house like yours known about it?  With a pocket listing, it is extremely difficult to get the word out.  The vast majority of buyers on the internet are looking on such sites as Realtor.com and are also working with agents.  They’re all geared to that, and not to remembering about some house they heard about via word of mouth.  Even if an agent hears about your pocket listing, if he doesn’t have a buyer for it right then, it is very difficult for him to remember it 2 weeks later when he does.

Anecdotally, I recently had a pocket listing (against the advice I gave the seller, who didn’t want “hordes of lookie-loos tromping thru the house”) but, after 3 weeks of trying, we didn’t have a single acceptable offer.  And, after 65 years of living here and 30 years in this business, I’m pretty well-connected in PV, if I do say so myself.  I finally convinced the seller that it was in her interest to expose the house to the market if she wanted to get top dollar.  Within 3 days of going on the MLS, we had multiple acceptable offers and that house is now in escrow.

It is important to remember that, for better or worse, agents from all over the State now have access to MLS data.  Used to be that buyers looking in, for example, PV used a PV agent and as long as that group knew about your house, we were good.  While the same set of buyers are now looking in PV, they have been fragmented to agents all over Southern California.  If the ideal buyer for your house happens to be working with some agent from Manhattan Beach, getting word about your [pocket listing] house out to him is nearly impossible — especially since we don’t know who he is.  I fought tooth and nail to avoid this situation, but I lost that battle to a majority who apparently didn’t understand the consequences of merging MLS’s across the State.  Like it or not, that’s the system we’re stuck with.

Give me a call and we can discuss this or anything else you want to talk about — 310 613-1076.

 

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