I’m writing this to send to clients who remember the days when pocket listings were a big deal; things are different now.
There was a time when I had a “coming soon” filter set up in my inbox to capture the coming soon listings from Realtors around the Charlottesville area. If I saw one that a client wanted to see, I’d reach out to the agent, set a showing, and my client would have a heads up on the market. A lot of homes transacted this way.
Pocket listings were a big thing; this is a biggish story I wrote in 2013, “What’s a Pocket Listing, and Why should Consumers Care?”
(and no, I don’t have the data to support that, but I do know how many times I would see a new listing put in the MLS and immediately marked as under contract/pending with a note that said, “under contract before hitting MLS,” or “input for comp purposes.”
That policy has changed, with a slew of feedback from the real estate industry.
These are all behind the Inman (real estate news) paywall, but you’ll get a sense from the headlines.
- NAR, MLSs strike back against antitrust suit over pocket listing policy
- Court denies bid to stop NAR’s pocket listing policy
- Another pocket listing network sues NAR, alleges MLS conspiracy
The controversial rule is meant to effectively end the practice of publicizing listings for days or weeks without making them universally available to other agents, in part to address fair housing concerns. The Clear Cooperation Policy implementation deadline was May 1, and some MLSs have instituted hefty fines to enforce it.
I’ve seen more pocket listings this year than I can remember. “Pocket Listings” = a listing that a real estate agent markets quietly without putting it into the MLS. (I’m also seeing escalation clauses, bidding wars, offers within hours … and a lot of houses are sitting.)
Good? Bad? For whom? It certainly devalues the MLS for the public and Realtors, but does it enhance the value of a good, connected Realtor?
I asked for feedback from readers in last month’s note, and got some outstanding responses. This one is highly relevant –
Questions regarding pocket listings…
Who does it benefit the most and least?
The most? To me, it seems to benefit the agent who holds the pocket listings the most because then they can market themselves as having exclusive access to some of the best listings. This, thereby increases their clients and increase the number of pocket listings and on it goes to the benefit of that agent.
The least? To me, it seems to benefit the seller the least. I am sure the agent who convinces the seller of the pocket listing has their benefits they tout to the seller, but pocket listings result in fewer showings, which result in fewer buyers having an opportunity, which equals fewer offers. Fewer offers is a smaller pool to get a great offer and less chance of a bidding war.
I have admittedly limited experience in the area having only bought 2 homes and sold one. On our sale, I dealt with an agent I had a great deal of respect for and she indicated (during our evaluation phase) that she never does pocket listings and convinced me they weren’t good for sellers.
My gut reaction is that pocket listings are a questionable practice and borderline unethical and am surprised the licensing entities haven’t prevented them. But, that is just my gut reaction and I have an open mind and am willing to entertain counter points.
So What? And What’s that Mean for Consumers?
We now operate under the “Clear Cooperation” policy for Coming Soon listings.
- There is a new status in the MLS for “Coming Soon” that is not able to be automatically sent to clients. So, I’m scouring the MLS even more for my clients.
- Offices can market within their offices. So, Nest agents can tell Nest agents about coming soons, and we can show them, sell them, etc. This is an advantage to working with a bigger real estate company. For example, Nest is #1 in transactions and volume in Central Virginia, so this is a good thing for Nest clients.
- Agents at competing firms are not supposed to talk to each other about coming soons. This sucks, as I used to have a lot of conversations, friendly strategic small talk if you will, with other agents about what we were respectively bringing on the market. Often a “do you have anything good coming on the market soon?” or “My buyer is looking for this; I know you work X neighborhood, do you have anything?”
- There is now an even playing field (or should be) for consumers. Every buyer should have access to the same open market.
Could coming soon be a metric of the state of the market? 10/10 at 10pm (I didn’t mean for that, but it happened), there were 12 Coming Soon listing in the MLS. I don’t know; I’m always looking for metrics and insights into the market.