What is Pocket Listing
A pocket listing is any type of real estate listing that is retained by a listing broker or salesperson who does not make the listing available to other brokers in the office or to other multiple listing system, or MLS, members.
BREAKING DOWN Pocket Listing
A pocket listing may also be referred to as an exclusive listing. When a real estate professional is hired to list and sell a property, a listing agreement is made in writing between the seller and the real estate agent and their hiring company. Often real estate agents and brokers agree to cooperate with other agents and brokers and share a portion of the total commission paid by the seller.
In a pocket listing, however, a property will not be listed in the MLS, the official directory for all properties and land for sale, and therefore there is no agreement to work with other real estate professionals. Reasons for a pocket listing include the seller's desire for privacy or to sell to a certain individual.
Advantages and disadvantages of a pocket listing
A pocket listing may offer a considerable advantage to the real estate agent charged with selling the property as he or she has the listing exclusively to themselves and thus, full reign of the commission. The listing agent is under no obligation to share any portion of their commission with another broke or agent unless she or he wants to. The agent may also be able to procure both the sale of the home from the individual selling and the sale to the new client with a pocket listing.
However, there may be a disadvantage to a pocket listing, as the real estate agent is essentially acting as a solo agent and is not working with anyone else to sell the property. This is not a problem if the agent is confident in his or her ability to sell the property or already has acquired a buyer ahead of time, but if the deal falls through or the seller fails to produce results, the property is unlisted in the MLS and thus, does not have as much visibility to sell.
Example of a pocket listing
As an example of how a pocket listing might work, consider Client A, who is interested in selling his considerable estate, which is worth quite a bit of money. Client A already has a family member who has expressed interest in purchasing the home and is serious about the inquiry. Because Client A already has a buyer set up, he contacts the real estate agent he has used in the past with a pocket listing. The listing is not put on the MLS and is handled as an exclusive listing and sale from Client A to Client A’s family member.