There are a few names for them: Pocket Listing, Office Exclusive and Off Market are the main names for listings that are not being publicly advertised in the MLS. Since the pandemic hit and housing demand skyrocketed and inventory shrank, pocket listings are on the rise on Martha’s Vineyard, as well as the rest of the country.
So, what is a pocket listing? It’s a listing where the broker usually holds a signed listing agreement, but does not advertise the property or put it into a Multiple Listing Service (MLS). Pocket listings are most popular in luxury markets like Martha’s Vineyard.
Why would someone want to list their property this way? Often it’s for privacy reasons – they may not want the interior of their home splashed all over the internet. They may not like the idea of strangers coming through their house and viewing their personal effects.
AND They only want to sell for the right price. Often sellers feel a Pocket Listing will allow them to test the market without too much exposure. If they don’t get their price, they can continue enjoying their residence as they have been.
Sounds pretty smart, right?? Well, the downside is this:
You will never know what price you can get for your property unless you make it available to everyone. Gone are the days when just a few agents are selling all of the luxury real estate in each market. With the amount of technology available to people today and the amount of online research buyers do (yes, in ALL price points), your best chance of getting top dollar is through exposure to more buyers. Furthermore, millennials are now the largest adult generation and are very active in the luxury market. Do you think they will rely solely on their real estate agent to find their perfect home and tell them what to pay for it? From my experience, that is a solid no.
Now, knowing this, why would a real estate agent or broker think a pocket listing is a good idea? Well, it allows the company to try to obtain both the listing side and the “selling” side of the commission, an industry term known as “both sides of the transaction”. Of course, the agent also spends less time and money on advertising, marketing and showings, so it’s really a huge advantage to the brokers and agents. Additionally, it’s a way to get a foot in the door. Provide a listing to a seller without requiring them to make a big commitment and hope they become more serious in the future. That way, you’ll be the agent they choose when the time comes.
What does the National Association of Realtors (NAR) think about pocket listings? Interestingly, right when the real estate market was taking off in May of 2020, during the pandemic, there was a “clear cooperation” policy that went into effect, which basically bans these listings. The reason for NAR taking this stance is that by not publicly advertising a listing, it essentially allows discrimination. Some sellers could opt for a pocket listing so that they can choose the type of person they want to sell to. Pocket or Off Market listings are allowed, but any broker who is a member of NAR must have their sellers sign an agreement stating that they understand their property is not being advertised to the public.
So, am I against pocket listings? Not necessarily. I think they are ok under certain circumstances, but sellers (and buyers introduced to a home that is off market) need to have all of the information, so they can make the best decision for their unique circumstances. Perhaps a hybrid model of the Pocket Listing can offer some level of privacy for the seller, while making the public aware that a property is for sale but with limited online photos and showings with qualified buyers only.
In closing, if you’re considering listing your property on Martha’s Vineyard, you should think about the best strategy for you. I am always available to help guide you in these decisions and would love to connect with you to discuss your individual goals.