Foreclosure in 95409>Question Details

Joe, Home Buyer in Santa Rosa, CA

Why is the phrase pocket listing such a touchy subject?Why does nobody want to acknowledge this fact of life?

Asked by Joe, Santa Rosa, CA Mon Apr 13, 2009

Wouldn't you agree that it is even more "unethical" to pretend like this practice does not exist,and continue to ignore the fact that the public never gets the chance to make an offer on these obviously well kept homes and good deals.Is there anyone brave enough to tell me that these listing agents who have lists of REO's that have not yet been publicly listed,are not first having investor buddies,family members and other insiders pick through the list and buy up the good deals,and then throw the scraps to the public. I know that there will be many of you that comeback saying things like "Many asset managers require the home to get listed for 78 hours to gain maximum exposure and generate multiple bids" While this may be true,we all know that the asset manager will bend on this rule if a nice all cash offer comes up,so please dont go there.I am looking for one of these homes,I have all cash. can someone direct me to an unethical agent or broker that wants the sale.infosponge76 at yahoo

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Mike Kelly Allison Norman’s answer
Joe, I don't think "pocket listings" are a "touchy" subject. They are done all the time. I personally strive and advise my client the best way to get the highest amount of money is by exposing it to as many buyers as possible. "Pocket Listings" by themselves are NOT unethical but the ethics about how one handles a "pocket listing" are sometimes questionable. The commercial field is rife with pocket listings or as they are referred in the industry "exclusive listings" which don't neccessarily mean one needs to put them out there for all Realtors to sell.
The history of our MLS came about as many agents realized the "pocket listings" they had were simply "open listings" which the Seller would give to every Tom, Dick and Harry with no right of notification if it sold and no obligation to pay the agent for bringing an offer. This stopped agents from sharing the listing and some never got over the habit of hoarding their listings even after the MLS took form and was successful. Many a Seller who does not want to alert the community they are selling may opt to grant ONLY a pocket listing. I think this limits their marketing opportunities but they insist. They can list and become an "exclusive listing" with an exception to the MLS. It becames a "pocket listing" if one does not really HAVE a listing signed by the Seller. The MLS brought forth the "exclusive" listing with the obligation of the member office to place all of their listings into the MLS for all to sell with the assurance they would get compensated and noticed should the listing sell or the seller decide not to sell. It also created cooperation between offices and protection so they could go out and solicit business and share with all in the real estate community.

But usually today it is a listing which is NOT really an "exclusive" with the agent but a property he knows a Seller is willing to sell. We've heard it a thousand times, usually by For-Sale-By-Owners who tell you if you got a buyer bring them by. Now if the agent doesn't have a buyer s/he may mention to a fellow agent, "Hey, I've got this pocket listing. You got a buyer?" They then in turn go and list and then sell the property. It's not an "exclusive" and could be listed for that day just to show a paper trail for the agent's getting paid.
Now getting to your question--I know you just loved my MLS history lesson--I would NOT dare pull the scenario you laid out in your rather cynical, bitter post. Why would I risk alienating my Assett Manager and particular lender or third party resource by being the "unethical" agent you so demand? I know a colleague who just made a super connection with another third party resource company because the agent you so seek got bounced from this company for just the antics you so desire!
I had a property I sold which generated 7 "cash" offers and which another office purchased for one of their clients. We vetted it properly and the buyer feels they got a terrific deal. The sad thing about your post is not only your frustration but also your willingness to enter into a pre-medidated fraud against a lender by conspiring with an agent to knowingly break the law. You violate not only the community guidelines of Trulia but compromise your own ethics. This market generates all sorts of sharks swimming in these uncertain waters. I've seen your particular fin circling for many months. I hope you get the agent you deserve!
2 votes Thank Flag Link Mon Apr 20, 2009
I've been investing for some time and really don't see how it's "unethical" to offer properties to your network of known buyers first. It's practical. If I know someone is on the market for a 3 bed/2 bath home and I just so happen to be selling one, of course I'm going to reach out to that person before going through the effort of listing the property on the MLS.
If you're looking for these offers, then start networking. Get your name out there as a cash buyer. If agents and brokers know you're on the market for a certain type of property and have cash in hand, they will make sure they reach out to you with deals that they come across. They'd be horrible salespeople if they don't.
I've always found that the people calling pocket listings unethical are the ones that simply want to get in on the action. A bit hypocritical? Instead of parading around calling things unethical and unjust, make an effort to learn about who in your area seems to be dealing these deals that you want, and work to get in on them. It's all about networking and proving yourself as a valid buyer.
0 votes Thank Flag Link Tue Sep 25, 2012
As real estate agents, we are bound to obtain the highest and best price for our sellers. How can you possibly think that a pocket listing that is only exposed to a fraction of potential buyers can get a higher price and be beneficial to a seller? By not exposing it to the MLS, a pocket listing is just a glorified For Sale By Owner. Obviously, the more buyers a listing is exposed to, the higher price the property will obtain. Pocket listings are a disservice to a seller and benefit only the listing agent. They are unethical and should be illegal. Shame on anyone who does a pocket listing. It is just plain greedy.
Flag Thu Apr 25, 2013
I am a licensed Real Estate Agent in San Francisco, and am determined to get pocket listings out in the open for all to share. That's why we launched a new site that everyone can browse: I invite you to check it out.
Web Reference:
0 votes Thank Flag Link Sat Aug 21, 2010
I am a licensed Real Estate Agent in San Francisco, and am determined to get pocket listings out in the open for all to share. That's why we launched a new site that everyone can browse: I invite you to check it out.
Web Reference:
0 votes Thank Flag Link Sat Aug 21, 2010
Pocket listings are TOTALLY unethical. Many agents will steer their clients towards pocket listings, either knowingly or unknowingly, so that they can get both sides of the commission. Pocket listings are a disservice to the seller because their property is not receiving the maximum exposure that it could, if it were openly listed on the MLS. More exposure means potentially reaching more buyers and potentially getting a higher price for the property. It is a touchy subject because agents try to justify that this behavior is 'ethical' and in the best interest of their seller when it really isn't. Most MLS services try to discourage pocket listings because it isn’t fair to other agents who subscribe to the MLS and opening share their listings, if other MLS members are not doing the same. I for one am totally against pocket listings. I have been burned in the past by greedy agents who refuse to negotiate with you and your buyer, or make negotiations very difficult, because they found a buyer of their own for their listing and they want to act as a dual agent and receive both sides of the commission. I think if an agent is a member of the MLS, then the practice of pocket listings should be punishable by fines, loss of license, or suspension from the MLS.
0 votes Thank Flag Link Tue Jun 29, 2010
Which came first the Real Estate Agent or MLS? MLS is a way for a third party to get a piece of the action and at the same time provide a service.
Flag Wed Jun 18, 2014
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