If you clicked on this video, you’re clearly interested in pocket listings, how to find them, what they are, and what it means to you in the East Bay real estate market. And that’s what I want to talk to you about today.
What are Pocket Listings?
A pocket listing is a house for sale, more or less, by secret, wherein the seller and the listing agent in contract with the said seller have not publicly advertised the sale—whether to the greater population of all buyers and sellers on the internet, or with a sign, etc. Simply put, it is something that someone has “in their pocket.” They are the only ones who know about it, and they tell a couple of agents or buyers about it, but they don’t blast it out to the entire world.
There are a couple of reasons that these pocket listings come up, and I want to name a couple because many people ask me, “In this crazy seller’s market that we’re in, why on earth would anyone even consider doing a pocket listing?” Well, here’s a couple of reasons.
Why sellers consider doing a Pocket Listing?
1) It costs a lot of money (and time) to stage and prepare a house for sale.
First, it costs an awful lot of time and money to stage and prepare a house. In most cases, when we bring our whole crew to paint, stage floors, lights, and more, it costs anywhere between $15,000 to $30,000 (or more) and takes at least two to four weeks. Not to mention the disruption to your life as a seller, whether you’ve moved out or you’re still living in your house, it can be really chaotic.
Therefore, in an effort to avoid that, a seller might go to their broker and say, “Hey, if you bring me a buyer privately, and we get something around this price, then we’ll sell the house. We won’t go through all that advertising, open houses, photos, and all of that stuff.” So it’s a kind of convenience factor.
2) They’re willing to accept a “Make Me Move” price.
There’s also a group of people, and this is very prevalent around the holiday season from November and December into early January, who says something to the extent of like, “I’m planning on selling. I’m going to go on the market, but I’m not ready to do it quite yet. However, if someone were to give me a million dollars today, I would take that, and I would just be done.” It’s like a “make me move price,” if you will.
Sometimes, people will opt for that because they’re relocating but not for a month or two in the future. Or, they’re waiting for the season to turn, like when it’s the end of the year. Then, if they get their buyer at their price, they would be willing to transact without going through all of the preparation cost/headache mentioned earlier.
3) They are incredibly private.
Now, there is a group of people who are just incredibly private. They don’t want the entire world looking at the photos of their house. They don’t want everyone traipsing through their property. Privacy is key to some people. Although, in my experience, it is a very small group of individuals who choose to list this way.
What should you do as a buyer?
Let’s talk about you as a buyer. Potentially, what you might be looking for when it comes to pocket listings, how to get them, what’s different about them, and what’s important to know.
1) Ask your agent how they come in contact with Pocket Listings.
When you’re talking to an agent about either working with them, always find out how they come into contact with pocket listings. Generally speaking, these are very relationship-driven transactions. Meaning, the agent on the seller side and the agent on the buyer side know each other somehow. Maybe they’re in the same office or perhaps they work in a very similar geography and they have a great relationship. Thus, information gets around in those circles, whether formerly or informally. You need to figure out how you can get into the flow of some of that information.
Suppose you know for sure where you want to buy a house. It really helps if your agent knows who the top listing agents are in that area and has a good relationship with them because there’s a decent chance to get an opportunity to look at one of these pocket listings.
Rules about Pocket Listings are changing.
When you have a pocket listing or a private listing of some kind, it doesn’t go into the MLS. Because if it does, it would be syndicated out to Redfin, Zillow, and all the real estate websites all over the world. Thus, if the seller doesn’t want that, or they don’t want to go live yet for whatever reason, but they’re willing to transact, they can choose to list their house as a pocket listing. As a result, the public doesn’t have access to that information.
One caveat to this is within the last year or so, the Multiple Listing Service (MLS), the California Association of Realtors, and National Association of Realtors have started to change their stance and views on pocket listings and the exclusivity of all that information. Generally speaking, at least right now, in the Bay Area, if you start to advertise in any capacity to the public, it has to end up in the MLS within 24 hours. Consequently, they came up with this status called coming soon.
2) Look for “Coming Soon” listings.
You’ll see this on Zillow sometimes. You have to search for it a little bit but it shows up as a coming soon property as opposed to an active property. What that means is, it hasn’t actually officially started adding up days on the MLS.
For example, someone has put up a listing in the MLS and said it will be coming soon. So what that means is it’s just not quite ready yet, but they’re open to getting a little exposure or potentially transacting now.
If you’re planning to buy a house in this market, the coming soon listings is a status that you need to be focused on and pay attention to in your automatic searches or on your Zillow searches. It can be critical to your success too.
3) Go and walk around the neighborhood and ask people.
Then, of course, there is the good old-fashioned networking tactic. I’m not talking about just calling every agent in town to figure out what they have coming up. I’m talking about meeting neighbors, finding out who in the community might be selling, who knows who, how you have connections with those people, and generally being social.
I always recommend that prospective buyer stake an afternoon and walk the neighborhood they intend to live in. In that time, they can talk to people, and tell them you’re thinking about buying in this area to see what they say. They’re probably going to say, “Oh, well, the Joneses down the street are thinking about selling. I think I saw a moving truck out front. I think they said they’re going to Idaho or something.” So you might go and then try and meet the Joneses and see what happens.
There is a little bit of legwork, but it could be worth it in this intensely competitive market. So keep these in mind: talk to your agent, look for coming soon listings, then just do some boots-on-the-ground research because when we’re talking about this level of competition and transaction, putting an edge in your favor in any way is absolutely critical.
I hope my blog on pocket listings has helped you.
If I can give you more context on the process of buying or selling your home, please do not hesitate to reach out. My information is below.
Here’s to all your success!