Home Selling in 94806>Question Details

Quincy A, Home Seller in 94806

Should I consider selling as a "pocket listing"?

Asked by Quincy A, 94806 Wed Feb 10, 2010

My real estate agent is recommending that I consider having him initially try to sell a small investment property (single-family home) as a "pocket listing." I'm relatively new to real estate (just getting my feet wet!) so this is the first time I've had to consider an off-market option. Apparently I would set a price and he would tell all the brokers in his office about it. He said that there is a good chance that someone will have a client that will be interested. The benefits to me, as I understand them, would be that I don't have to stage the home and I might not need to finish the last of the clean-up that still needs to be completed. I'd also walk away with a profit I felt okay about (but might not be the max). The benefits to him are... what? That it's easier than a full listing? I'm wondering if this is a typical recommendation in this market, or if most realtors would suggest putting it on the MLS to garner more competition? Thanks in advance for your advice/thoughts!

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Quincy..................I see no advantage for you to give this agent a "pocket" listing. I am frankly quite bothered by the fact that he is even trying to talk you into this. It's different if you said you didin't want others marching through........sometimes elderly sellers might feel that way..........but for him to suggest this is a good way to market your home, i just don;t understand

You will achieve the best price by getting the most exposure. You want exposure on the MLS and the internet.

If you don't "stage" or prep your home for sale, you will get less, whether it's showings from a select few that he might bring in, or a large number of agents brought in through the mls.

You ask what the benefits to the agent might be? Maybe he is hoping to find the buyer, and make the full commission, for himself or his office. Maybe he doesn't like to work too hard..........Honestly, ..I really don't know what his motives are. Did he offer you a lower commission to try and sell it this way?
There was a company by me that used to pocket their listings for 2 weeks...to try and keep the sale in house...but the seller was offered a lower commission as an incentive to do that. I still wouldn't recommend it even with a lower commission.

What I do know is.........don't shortchange yourself................do whatever is necessary to properly and fully market your home through the MLS and all other outlets. Maybe this isn't the agent you need. Speak to another agent (or 2) and see what they propose for you. Get everything in writing.

Good luck!!
Debbie Rose
Prudential NJ Properties
2 votes Thank Flag Link Thu Feb 11, 2010
Quincy,
I've never understood any benefit to the seller to have a pocket listing, other than privacy issues.
I suppose the benefit to the realtor would be if he already had somebody lined up and he could get both sides of the commission.
2 votes Thank Flag Link Wed Feb 10, 2010
HI Quincy,
The best way to sell a home is to attract any and all, ready willing and able buyers.
If your agent wants to do a pocket listing, that would omit around 90% of the potential buyers.
Instead of possibly having 10 offers, some good , some bad, some in between, You may get one offer and how good will that be?
Pocket Listings are usually done out of privacy or greed. Seeing as how your agent that you are thinking of using has suggested it as opposed to you I would assume greed.
While I do not know all the facts in this matter I think it would be wise to find an entirely different agent as it appears that this agent does not have your best interest at heart. Instead it appears your agent has their interest at heart.
When you do sign an agent you might consider adding to the listing agreement that there shall be no dual agency in this transaction.
You would be wise to consult a Real Estate attorney for a few hundred dollars before you sign anything and get some good advice and bring up the questions you have.
I am sure a real estate attorney will have some choice words for this situation and give you great advice.

I highly recommend finding and consulting with a real estate attorney before you sign with this agent.
I would finish the home if at all possible. Think of it this way,.. you don't try to sell a filthy car.
As for the profit you felt OK about,... Wouldn't you prefer to maximize your profits?
The benefits to him and or his office would be the entire commission as opposed to half the commission.
I wouldn't take this lightly. I would consult a real estate attorney.

Harold Sharpe
So Cal Homes Realty
(951) 821-8211

http://www.socalhomesrealestate.com








































































































Harold Sharpe
So Cal Homes Realty
(951) 821-8211

http://www.socalhomesrealestate.com
1 vote Thank Flag Link Wed Feb 10, 2010
I don't believe you'll get the best price for your house in someone's pocket. The best way to get top dollar, in any market, is to expose it to the widest audience possible AND to make it marketable and attractive, especially, as you say, after it has been a rental -- the least you ought to do is paint and upkeep anything that is not up to par. As for what effect any agent doing a "pocket listing" may have to your bottom line, I've seen where agents who did something along these lines weren't looking to benefit the seller particularly. Good luck, and I sincerely say this because in San Pablo, 94806, property values have dropped considerably -- I sell houses in the area and had a couple of clients who have houses there presently.
0 votes Thank Flag Link Fri Nov 12, 2010
I can only say that if you trusted your agent when you interviewed and hired him and he had the credentials then, you need to trust him now. In another state where the market is totally different, I cannot tell you what your agent should be doing in your market. I wouldn't like it if an agent second guessed me and my marketing strategy here in Kansas City. So, in a way, it's not fair to ask us this very important question.

I am familiar with the process, and have even used it successfully myself. I once had a home that the sellers wanted to put some minor finishing touches on (that wouldn't have impacted the value, or price) before they put it on the market. While we waited, I wanted to get to work. I heavily promoted it in my office as a pocket listing, and we sold it before it came on the market. The first couple that looked at it bought it for full price! My sellers were spared from having to maintain a picture perfect house, and got the price they wanted - what the house was worth.

The benefit is that it promotes exclusivity - qualified buyers can get in early & before everyone else does. It can increase your chance of getting full price with less hassle. That buyer knows that if things don't go well that you can bring it on the market and find a new buyer. Your agent knows the agents in his market & in his office, and knows who may have buyers and how to best promote his listings. This is pinpoint marketing at it's best. Reward his innovation & desire to have your house stand out by marketing it differently than every other agent. This strategy will not work with every house. By the way, by doing it this way, he actually reduces his chances of getting both sides because he can't widely expose it to attract buyers if he doesn't already have a buyer today. He is marketing it to agents who do have buyers today. Remember, he's the expert - Trust him! And.....good luck, Quincy!
0 votes Thank Flag Link Thu Feb 18, 2010
The more people you can expose your property to the better, with reguards to home price and terms. Pricing the property correctly, a strong marketing plan and a general clean up can make a big difference. With that said , if he can present you with an offer that fulfills all your needs and requirement i guess it ok. I just perfer blasting it out to as many people as possible, then you have options.

Mike Rowland
Windermere Rowland Realty
510-222-9150
0 votes Thank Flag Link Thu Feb 18, 2010
Quincey,

This can change based on the strength of your market but giving a strong listing agent a chance to double end the property can benefit you but it can backfire if not handled properly The key to the process is that the pricing has to be better (as in quality not value) and closer to on target and not low.

If you listed you home very well at adjusted comparables, some scared buyers out there may come in and write a full price offer. In our area where multiple offers are driving people nuts, some people go back to bubble era thinking and write with the lsiting agent to "get the home". This is a dumb strategy since it means overpaying. Everytime I see a home lose with an amazing price it's usually double ended by the listing agent.

The risk of course is that the situation is not handled properly your home doesn;t sell right away and suddenly you cost yourself money and time. IN general, the better plan is to list low and drive multiple offers if you are in that sort of market.
Web Reference: http://bob2sell.com
0 votes Thank Flag Link Thu Feb 11, 2010
As a Seller I'm not sure you benefit from limiting the knowledge that your property is available to be purchased. As far as the benefits you mention: not needing to finish cleanup or staging the home??? I believe overal condition & first impressions play a part for most buyers when determining interest and/or what they are willing to pay for a property. If there is a reason you want to limit exposure/visibilty that your property is for sale that a different issue.
0 votes Thank Flag Link Thu Feb 11, 2010
Hello Quincy. I think there is a time and place for a pocket listing, but generally, pocket listings are not favored as they don't give the property the maximum exposure. They are a way to get the listing agreement signed with sellers who are not quite ready to put the property on the market, which appears to be the case here. I am not sure why the buyers of the agent's fellow agents would be willing to buy a property that still needs finishing touches while the buyers of outside agents are not. Typically, buyers deduct more money from their price than what it costs to do the work. The buyers of the inside office agents are not blind and they don't want less value for their money. It's the buyer who pays the money, not the agent. All in all, I don't see how you would benefit from a pocket listing. Maybe there is something you did not mention. You also don't mention for how long this pocket listing is supposed to be good for. How long is "initially"? How long are you going to wait and see if a buyer comes along that pays you what you want without the work being done?
0 votes Thank Flag Link Thu Feb 11, 2010
Ute Ferdig -…, Real Estate Pro in New Castle, DE
MVP'08
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Quincy A, how'd you come into possession of this home?
0 votes Thank Flag Link Wed Feb 10, 2010
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