What is a Pocket Listing?
May 10, 2013
"Pocket listing" is slang for a listing that is not on the MLS. However, pocket listings appear in many different shades.
Sometimes, a listing is merely referred to as a "pocket listing" in the short time between when it is secured by the sellers' agent and the time it appears on the MLS. A listing can sell before the broker completes MLS paperwork, which would mean the listing sold to someone who knew about the listing outside of the MLS, be it to a friend of the seller, a buyer known by the listing agent, or a colleague of the listing agent. Sometimes, this happens with an offer made during a "prelisting" period. However, there still may be "office exclusive" MLS rules with which the broker will need to comply.
Other times, homeowners may seek to sell their homes privately. They might ask that their agent refrain from listing the property on the MLS to keep news of the sale quiet. In this case, sellers are selecting a pocket listing more as a marketing choice than anything else. But REALTORS® are bound by the Code of Ethics to get the best deal for their client. Sellers should be cautioned that restricting a large pool of eligible buyers from knowledge of the sale might reduce the final sale price.
The National Association of REALTORS® has not defined what constitutes a pocket listing, nor do they have an official policy regarding the practice. However, there are objections to some of the ways these so-called "pocket listings" are used by some real estate professionals. Some practitioners argue that pocket listings violate local MLS rules. Others worry that keeping properties from the MLS may skew comparable listing numbers for appraisers. Still others worry that pocket listings could lead to abuses of single and dual agency relationships, if not properly handled.