A “pocket listing” is a real estate industry term that describes a property for which a broker has a signed listing agreement with the seller, but where the property is never advertised publicly through a multiple listing system (MLS) or where advertising is limited for a period of time.
Normally, when a broker is hired to sell a property, the broker agrees to cooperate with other brokers in order to sell the property and therefore to share a portion of the total real estate commission paid by the seller. However, certain listings are held as “Pocket Listings” and the same broker looks to represent both the buyer and seller.
Now, you may wonder why anyone would be interested in doing something like this.
There are benefits to each of the 3 parties involved in a “Pocket Listing” (seller, broker, buyer):
- * Seller: One advantage of a pocket listing is that the seller can negotiate a more favorable commission because there are fewer agents involved in the transaction. Another advantage of a pocket listing for a seller is that their property will be sold privately without the inconvenience of an open listing. During slower market conditions, there are many curious people that simply browse properties but do not actually intend to buy. Pocket listings eliminate this issue because the listing broker can qualify a potential buyer on their willingness and ability to purchase before showing the property.
- * Broker: The main benefit for the broker involved in a pocket listing is that they can earn a larger commission than with an public listing. Even with a lower negotiated commission a broker can earn more through a pocket listing than in a regular 50/50 split. For example a broker can agree to list a property for only a 4% listing fee, yet this would still be higher than the standard 2.5% commission that would otherwise be earned if the listing agent had to split a 5% listing fee with another broker. The broker earns a higher commission while their client pays lower selling costs. Truly a win-win situation!
- * Buyer: The primary benefit for buyers is that they have exclusive access to a listing otherwise unavailable to the general public. Some estimates are that nearly 1 out of 3 real estate transactions take place without being openly listed in an MLS. There are incentives for both the seller and the listing broker to sell a property as a ‘pocket listing’. Buyers could also have more negotiating power if the seller is spending less money on comission for another broker.
Pocket Deed is looking to disrupt the real estate industry by revolutionizing the way “Pocket Listings” are marketed and discovered. Pocket Deed combines the mass exposure of public listings with the benefits of “Pocket Listings”.
Pocket listings uploaded to the Pocket Deed platform are available to BUYERS EXCLUSIVELY, connecting listing agents directly with buyers. Not with other agents. Not requiring a commission split.
Pocket Deed ensures the integrity of this process by keeping the exact listing address hidden, and instead showing a ½ mile area where the property is located. If a potential buyer wants to know the exact location, to see the property, or to write an offer, they would need to contact the listing broker directly through Pocket Deed. Only users with ‘buyer accounts’ are able to contact the listing broker for more information. The buyer must also confirm two things before their message to the broker will be sent:
1) I understand I am contacting the listing broker(s) directly.
2) I understand the listing broker(s) will represent both the seller and myself if I purchase the property.
- Pocket Deed
This is a revolutionary way to connect brokers with prospective buyers and to promote Pocket Listings.