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How Does a Pocket Listing Work?


If you watch real estate shows, you might occasionally hear a reference to a pocket listing. A pocket listing is a way for real estate agents to intentionally keep a home off the Multiple Listing Service (MLS) as they look for the right buyer.

A pocket listing isn’t publicly listed, even though it’s for sale. The real estate agent does private showings with potential buyers instead of putting it on the MLS, which is public-facing.

Pocket listings aren’t the same as having a coming soon listing. Coming soon is a way for an agent to designate that a home isn’t listed yet, but shortly will be on the market.

Pocket listings aren’t illegal, but they are frowned upon. The National Association of Realtors, the largest real estate agent professional organization in the country, essentially banned pocket listings for members in 2019. The NAR handbook says that within one business day of marketing a property to the public, the listing broker has to submit it to the MLS.

The NAR wants to ensure cooperation among real estate agents, which was one reason it cracked down on pocket listings. The organization also wants to ensure competition, meaning all buyers have a chance for a listing, and sellers get the chance for the best price.

Some agents can bend the rules to ensure they’re compliant with NAR guidelines while still keeping a listing to themselves.

The policy of the NAR is that listings must be added to the MLS within one business day of the seller signing the listing contract. If a seller signs with a listing agent on a Friday, for example, the agent can use the weekend to do private property marketing.

Why Do Sellers Like Pocket Listings?

It sounds somewhat counterintuitive to do a pocket listing, but there’s a reason some sellers prefer this option. Sellers might like pocket listings because they want to maintain privacy. They control who has access to the property and when, and everyone won’t know they’re selling immediately.

Some sellers like pocket listings to test the market to see what the response will be like to their selling price. With pocket listings, it’s possible to adjust the price without making it look like a price cut that would otherwise show up on the MLS.

The third reason for a pocket listing is that the seller might already have a buyer. A seller might want a listing agent who will sell their property to a specific buyer.

There are ways outside of a pocket listing to achieve the things above, though.

For example, if someone wants the privacy of their listing, they can ask their agent to put the details in the agent’s remarks so they aren’t in the public sections of the listing. They can also ask the agent to verify financing before they agree to showings.

You might miss out on the best possible offer with a pocket listing if you’re a seller. You cannot know whether the buyer you’ve chosen actually has the strongest offer.

There’s also the potential for a listing agent to violate Fair Housing laws if they choose who can see a home. There may be a greater risk of discrimination in these situations, so an agent has to be very careful.

Finally, pocket listings can affect home values negatively. If the sale isn’t in the MLS, it will not show up as a comparable listing if an appraiser or agent tries to determine its worth.

Again, while a pocket listing might have its advantages, they’re something to be cautious of for sellers and their agents because they also have risks.

Position Realty
Office: 480-213-5251

What Happens When Companies Buy Houses?


If you’ve ever seen signs for companies that say they buy houses, or maybe you’ve been approached by one, you might find yourself wondering exactly what it is that they do.

There are a couple of different types of companies that buy houses cash. There are those ones that you see advertising in your community, but there are also tech-driven companies that do it.

How Do Home Buying Companies Work?

If you want to sell your house, you typically will hire a real estate agent, and then they’ll place it on the MLS. If you want to sell it fast without doing work or paying a commission, then you might instead try to sell it as-is.

There are companies that buy houses as they currently are for cash. This can mean local cash buyers, investor networks, or iBuyers.

• A local cash buyer is typically just someone who will buy your house and either flip it or turn it into a rental.
• An investor network is one of those companies that you see advertising most often, and they’re local franchises. They don’t pay much for houses because they usually focus on ones that are in pretty bad shape, and then then they flip them.
• Then, there’s the term iBuyer. The term stands for instant buyer. These are companies that use algorithms and data in the form of what are called automated valuation models to determine what your home’s worth. Then, based on their data, they’ll make an offer.

What Are the Benefits for You?

If you want to sell your home quickly, one of the three above cash buyer options can be good.

The vast majority will buy your house just like it currently is, so you don’t have to make repairs or updates, nor do you have to worry about staging it.

They’ll usually be flexible in helping you find financing solutions, and you’re probably going to get a relatively fast closing. These companies don’t have to go through the traditional financing process from a bank, so they might be able to close in seven to 14 days.

You’re also avoiding real estate commissions and closing costs.

Are There Downsides?

While selling your home quickly and easily to a company can seem great, there are certainly some downsides you have to be aware of.

First, there’s a pretty high likelihood you’re not going to get full market value. You’re trading that for simplicity and lower costs.

There’s also always a risk of predatory tactics or even scams.

If a company is trying to pressure you into selling your home for far less than it’s worth, that’s a problem.

There are a lot of legitimate companies that do buy houses for cash, but not all of them are completely legit. You have to do some research if you’re thinking about having a company buy your house to make sure it’s not a scam.

How Does the Process Work?

If you’re interested in the direct-buying model, which is ultimately what all the examples above are considered, then you might wonder what the process looks like.

Companies might vary slightly in how they do things, but typically, the home buying company might come to you, or you could approach them. The buyer or company will get some general information, and then they’ll schedule a walk-through.

The buyer will determine the market value of the home once any updates or repairs are made. At that point, they’ll present the seller with an offer, which will include the price they’re willing to pay, a closing date, and terms of the sale.

There are negotiations, and then once everyone accepts the offer, a closing date is set.

When it comes to direct buyers you just have to think about what your priorities are and how those weigh against the potential downsides. If your biggest goal is to move quickly and avoid having two mortgages, a home buying company can be a good option if they’re reputable.

If you’re in no rush and you want the highest price for your home, then you might go the traditional route in selling it.

Position Realty
Office: 480-213-5251

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