A Guide to Pocket Listings: Pros, Cons, and Use Cases

✏️ Editor’s Note: Realtor Associations, agents, and MLS’ have started implementing changes related to the NAR’s $418 million settlement. While home-sellers will likely save thousands in commission, compliance and litigation risks have significantly increased for sellers throughout the nation. Learn how NAR’s settlement affects home sellers.

A pocket listing is an off-market listing not available to all buyers. Real estate agents do not advertise these houses on public channels or the MLS. Instead, they rely on private networks and ‘word-of-mouth’ to find buyers.

Pocket listings are slowly gaining popularity. In fact, 2 out of 5 real estate agents claim pocket listings have become more common. But does that mean it’s the right way to sell a house? Not only do you get less exposure, but you also have to pay agent commissions.

Instead, you can opt for a Flat-Fee MLS like Houzeo and save thousands of dollars in Realtor fees. You can also showcase your home to a big buyer pool, secure a favorable price, and sell fast.

How Does a Pocket Listing Work?

A pocket listing is an agreement between a seller and an agent to market a home privately. So, instead of public ads, your agent agrees to use personal contacts to sell your house.

The big difference here is that your home doesn’t benefit from the exposure of the MLS. Your agent keeps the details within their brokerage and only shares them with buyers who may be interested.

Standard Listing vs. Pocket Listing

Here’s the difference between a traditional listing and a pocket listing:

• Standard Listing: Your agent lists your home on the MLS. This exposes it to a wide audience of buyer agents and potential buyers. It’s a public way of selling your home.

• Pocket Listing: A pocket listing, on the other hand, is a private approach. Your agent markets your home through their network, not on the MLS. It can offer more privacy but may reduce the number of potential buyers.

The type of listing you choose affects how many people see your home, the sale price, and the time it takes to sell your property.

» PLS vs. NAR: Learn about the showdown between pocket listings and the MLS.

✅ Pros of a Pocket Listing

Pockets listings are a good idea if:

1. You Want Privacy

You can opt for a pocket listing if you dislike the idea of strangers wandering in your home. Also, for people going through difficult times like a divorce or death, pocket listings can prevent attracting unwanted attention. 

Pocket listings are also a good idea for celebrities and public figures. It lets them keep their house sale private and prevent footfall from unwanted onlookers.

2. You Have a Buyer Ready

If your friend or family member is interested in your property, you don’t have to go through the hassle of listing on MLS. You only need an agent to handle the transaction. 

3. You Want to Experiment

Pockets listings allow you to test the waters on the home price before putting it on the MLS. If you start out on the MLS directly with a price too high, you might be forced to reduce it. That becomes a public record and may also increase your house’s days on the market (DOM).

❌ Cons of a Pocket Listing

Here are some downsides of pocket listings that can limit your profits:

1. Less Exposure

Pocket listings are a good idea if you know the local market. If you don’t, you’ll seriously limit exposure to interested buyers. Fewer buyers and a lack of competitive offers may force you to spend more on concessions and home staging.

2. Lower Price

Because you won’t have buyers competing for your property, it’s possible you’ll be leaving money on the table. In fact, pocket listings closed for approximately 17% less than MLS listings.

Is a Pocket Listing Legal?

Yes, pocket listings are legal. However, Realtors must put such a listing on the MLS within one business day after marketing it to the public. It’s a condition set by NAR under its Clear Cooperation Policy.

A Realtor typically represents both buyers and sellers in a deal that involves a pocket listing. This means they get to keep double the commission cut. The Clear Cooperation Policy policy prevents such “misuse of various limited exposure marketing tactics.”

However, not all real estate professionals are Realtors. Investment brokers and real estate agents not registered under NAR don’t have a restriction on pocket listings.

Should I Sell My House via Pocket Listings?

If you wish to keep your sale under wraps, pocket listings are a great option. They avoid unnecessary bidding wars and prevent buyers from knowing about any price drops.

You also sell quickly with pocket listings if you have a buyer ready. Sometimes, you can also snag lower agent fees, as agents don’t have to spend much on marketing.

However, remember that without a ready buyer, you may struggle to sell your property. Also, because of NAR’s restrictions, it’ll be difficult for you to find a qualified Realtor to handle the sale. Instead, you might have to go with an investment broker.

The Bottom Line

Pocket listings can be more trouble than their worth for most sellers. Not only do you get limited exposure, but off-market listings also fetch a lower price than MLS listings. Moreover, since there’s a restriction on pocket listings set by NAR, you’ll have a hard time finding a qualified agent.

For good visibility, price, and a fast sale, choose the MLS as your preferred selling mode. Turn to Houzeo for maximum savings and a hassle-free sale. With Houzeo, you also skip paying the listing agent commission. Instead, you pay a one-time, small flat fee to list your house on the MLS.

Frequently Asked Questions

• Pocket Listing