Dangers of the “Pocket Listing” by
Barbara Wilson, Realtor, Coldwell Banker
There is a growing trend of
selling houses “off-market”, without going on the Multiple Listing Service(MLS). There may be valid reasons, but you risk selling
significantly below market value. There are
ways to address concerns while ensuring your financial interests are protected.
Agents here must submit the
listing to the MLS within 2 days of receiving it or you have to sign a waiver
keeping it off the MLS until a certain date or acknowledge that your house will
never be exposed to the full market. Why? To ensure that you are informed of the significant financial drawbacks of the
off-market listing while still allowing time to prepare for sale before it is
According to the National
Association of Realtors, off-market houses sell for about $39,000 less than
on-market houses. And 88% of buyers are
working with an agent. Agents find
houses by searching the MLS agent site. So if your house is not there, the only agent who
knows your house is for sale is yours, and possibly those in the same
office. Certainly they don’t represent all your potential buyers.
NAR has also found that over 90%
of buyers search online. Nearly every internet site pulls the listings
from the MLS sites. So if your house
isn’t there, it is hidden from 90% of buyers, dramatically reducing your showings, offers, and thus, your selling
It begs the question - why should
only a small group of buyers know about your house? Why should they be able to buy it without
competition? Don’t you think that someone
else might possibly write a higher offer
- if only they knew?
One reason may be privacy
concerns. If you are a professional
athlete, or other recognized person, you can protect your privacy by packing up
the family photos and memorabilia that might reveal your identity, which you
should do anyway – you are moving!
Require your agent to be present at all showings. And hold title in a trust or other means that
conceal your well-known name.
You may have health issues,
inability to leave for showings, or you don’t want the inconvenience. Some
solutions are to make it available to be shown during certain hours on a
certain day or days, perhaps related to your appointments or other temporary
outings. Have your agent present at
showings. Put the house on the market
when you have secured a new living situation, or go to a hotel for the
weekend. That will be much less expensive
than the potential loss of tens of thousands of dollars resulting from a
drastically reduced buyer pool.
Your house is a significant part
of your entire financial portfolio. The only way to guard it and ensure you are
not giving money away is to have full exposure, which comes through the
MLS. So don’t sell yourself short!