You may have heard a real estate agent mention that she has a “pocket listing.” This term may sound mysterious, but it refers to a concept that might help you sell your home. Let’s unlock the not-so-secret power of this selling strategy.
Give qualified buyers the first shot.
Typically when you list your house for sale with an agent, she puts a sign in your yard, lists your house on the multiple listing service (“MLS”) database, and has a professional photograph your home for online marketing.
With a pocket listing, before she presents your house to the public via these typical measures, your agent first shows the house privately to potential buyers whom she knows might be great candidates. In essence, she “pockets” the listing to give a select group of potential buyers the first opportunity to see your house. If the house doesn’t sell, she can then market it through conventional means.
Advantages of a pocket listing.
- One benefit of a pocket listing is privacy. Anyone who has hosted an open house knows that some visitors will be neighbors there simply for a look-see at the home. You may want to avoid this, or have other reasons for wanting to sell your home discreetly.
- Pocket listings also provide the chance to test your listing price before it goes public. Once a house hits the MLS, the clock starts ticking. If a too-high asking price causes your house to linger on the MLS, your listing can develop a stigma, and you may be forced to lower your price in order to sell.
- A pocket listing may also save you money. Real estate agents often spend hundreds, even thousands of dollars on marketing homes. If your agent avoids those costs by selling your house with a pocket listing, he may be willing to discount his commission, which you pay.
Disadvantages of a pocket listing.
- For every advantage of a pocket listing, however, there’s a disadvantage. The privacy of marketing to a limited group of people, for example, means your house isn’t exposed to a broader pool of potential buyers.
- Marketing to a small group also means your listing price isn’t tested in the broader market. With a pocket listing, it’s important that you and your agent research comparable listings and put careful thought into your asking price. Otherwise, you could undersell your home, or get a cold response if you over price.
- Pocket listings deny you the wide range of feedback about your house available through a conventional listing. This feedback from showing agents about what potential buyers did and didn’t like about your house can help you make changes to your property that can bring a higher price.