Pocket Listings Could Be the Key to Finding Your Next Home
There’s nothing worse than seeing the perfect home only to find it’s already the subject of a bidding war . As mortgage rates remain high and inventory remains low , competition for housing is only getting more intense.
If you’re looking for a home and are frustrated with how quickly they’re selling, or you’re struggling to find homes that meet your needs, there’s likely an untapped resource you can take advantage of: pocket listings.
What is a “pocket list”?
A “pocket listing” (sometimes called an “over-the-counter” listing) is a property for sale that is not listed on the Multiple Listing Service (MLS). This means that although a real estate professional is actively trying to sell a home, he is not easily discovered and does not show up when people search for available properties. There are two main reasons why real estate agents do this: first, if the seller does not want their property advertised on the MLS for their own reasons and signs a waiver form; and secondly, to sell the property to someone in their network, either because they know it is the ideal property for their needs or because there is the possibility of a higher commission since another agent will not be involved.
Pocket listings are somewhat controversial in the real estate world. While they are 100% legal, the National Association of Realtors (NAR) issued a rule in 2019 that requires licensed real estate agents to list a property on the MLS within one business day of “marketing the property .” However, it is still completely normal to sell a property to other agents or to a specific potential buyer without listing it on the MLS, so pocket listings persist and agents have a few tricks they use to stay within the letter of the NAR rule and still Receive the Benefits of Pocket Listing.
This means there is a relatively small but important supply of homes for sale that you may not see if you search online or even if you work with an agent because they are not yet listed on the MLS. But you can still find them, which means you can get there early and make an offer before the world rushes to snatch your dream home from under you.
How to Find Pocket Lists
Searching for pocket lists may take some time. But if you’re in a limited market and have a very specific area you’re looking to buy in, this work can pay off handsomely.
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Contact local agents. If there are pocket listings in the area, a local real estate agent is likely involved. Contact local agents and ask if they have exclusive or off-market listings in the area you’re targeting.
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Internet search. Zillow has a “coming soon” category where agents can list off-market properties 30 days before they are officially listed on the MLS. This is often used as a way to drum up interest in a property, but also gives you the opportunity to make contact before the listing is published.
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FSBO. Zillow and other real estate sites have For Sale By Owner (FSBO) sections, and homeowners who take the FSBO route also post on places like Craigslist or For Sale By Owner . These are off-market offers, even if there is no real estate agent involved.
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Homeowners. The final option is to contact people who already live in your desired area and simply ask them if they or anyone they know is selling or thinking about selling their home. This is probably the least effective option, but it can be an advantage.