Real estate is one of the biggest businesses in the world, and over the years, the industry has developed many “tricks of the trade,” that might confuse outsiders, but have very specific goals behind them. One of these is called a “Pocket Listing,” though in Canada it is known as the more descriptive “Exclusive Listing.” What is this tactic, and when do real estate agents use it?
Staying Off The Radar
A pocket listing is a real estate property that is deliberately kept off the MLS, or Multiple Listing System, which is the standard database that most properties for sale are entered into. Normally, a property entered onto the MLS is “public” in that anyone, including other real estate agents and the general public, can view a listing for their own consideration. In the normal real estate process, this means that other agents, with their own clientele, can freely show off the property for others to evaluate. Being on the MLS means wider coverage, with more potential buyers able to view the listings thus increasing the likelihood of a sale, but the pocket listing completely negates this advantage. So why would a real estate agent choose to exercise this option?
There are a number of reasons why the decision may be made. The most popular reasons relate to the value and uniqueness of the property itself. In the case of extremely high value, luxury homes, especially those that may actually have some fame or notoriety due to associations with celebrities or other people of influence, there’s simply no reason to make the sale and data about the property publicly available since the public at large simply won’t be in a position to the purchase the property. There may be other scenarios where the real estate agent may already be aware of a very small circle of buyers—perhaps even a single buyer that is all but guaranteed to purchase the property. In a situation like that, with select buyers already confirmed, once again, the idea of a public listing seems unnecessary. Other less conventional reasons range from the seller having very specific conditions and requirements that buyers must meet to even qualify for consideration, to a need for secrecy or discretion in the exchange of the property.
So while a pocket listing isn’t the traditional or widely used method of selling properties, at a certain level of real estate transaction, it makes it easier to serve a more discerning, elite level of clientele.