What the Heck is a Pocket Listing?By
Raleigh. “I hired this clown to sell my house and he did nothing. He didn’t even list the house in the MLS.” Don’t let this happen to you.
Charles and Aileen hired a real estate agent to sell their home. They had a nice home in a popular neighborhood. They lived apart. They agreed to sell the house to simplify the divorce process.
Charles liked to stop at The Hole (short for The Watering Hole) after work and network. He was an outgoing guy who shared his thoughts and feelings freely. Information on his pending divorce and the sale of his house was shared with anyone who would listen.
One day a real estate agent who sometimes joined the round table group said that Charles’ house was not in the MLS. Charles erupted. No wonder the house wasn’t selling. He dictated angry voicemails to the agent and his wife. “Incompetent” was the nicest thing he said to the agent and he accused his wife of deliberately choosing this clown so she could keep the house.
Once his evening at The Hole wore off, Charles was less abusive. Still angry, but more restrained. The agent called a meeting and explained pocket listings:
= The listing agreement gave the agent the exclusive right to sell their house.
= No MLS listing is part of the agreement.
= Agent not required to work with other agents. Only he could show the house. Exceptions were at discretion of the agent.
“Why didn’t you tell us this before you shyster? I would never have signed the agreement if I had known.” Charles growled.
Such outbursts weren’t new to Aileen. No longer intimidated she spoke up. She told Charles that pocket listings were explained by the agent and they chose this route for two reasons:
1. To motivate the agent – The agreement was for only 90 days. He would earn the entire 6% by selling the house within that time or they would switch agents.
2. Privacy – Aileen was a lawyer with political ambitions. It was important to her to keep the sale and the divorce low key.
A vague memory began to dawn on Charles’ consciousness. Maybe he shouldn’t have stopped by The Hole for a ‘sandwich’ before the meeting with the agent.
Final Note: Exclusive agreements with a broker or an agency can limit house’s exposure to potential buyers on one hand. On the other hand, buyers seldom buy the first house they see so agents can attract buyers without mentioning your specific house in their advertising. Pocket listings are not ‘the norm’ though they can be useful under certain circumstances. Key: Understand the option.
Kathy Godin, Branch Manager & Award-Winning Loan Officer
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