We often get asked about pocket listings and whether we have any of them. Because we do consistent marketing in this specific market (the 2-4 unit market), the answer is usually “yes”. We are periodically approached by owners of duplexes, triplexes, and fourplexes who want to privately list their properties with us and avoid the MLS completely. In other words, they approach us to have their property as one of our “pocket listings”.
In case you are unfamiliar with pocket listings, we’d like to take this opportunity to discuss them in detail, especially in regard to our specialty: San Diego duplexes, triplexes, and fourplexes.
What is a pocket listing?
A pocket listing is a listing that a real estate broker has that is not listed on the local MLS system. Generally, the only people who know the property is for sale are the sellers, the broker who has the pocket listing, and anyone they disclose this information to. It’s essentially a secret listing. The first question you may ask is, “why would a seller NOT want to list on the MLS?” While most people (including us) feel strongly that it would be to a seller’s advantage to list on the MLS for maximum exposure, they do have their own reasons to not want to list conventionally. Here are just a few reasons:
1. Discretion is the priority of the seller in order to retain the current tenants:
Often times, investment property owners want to sell their property, but are afraid that once their tenants are aware of the listing, the tenants will want to move out immediately. As brokers, we do everything in our power to ensure our listings on the MLS and internet specifically indicate that agents/buyers are not to contact or disturb the tenants. Although we take every step available to do maintain discretion, there are always those who do not follow instructions. Reason #1 is the most common reason our contacts want to pursue a pocket listing strategy.
2. They want to test the market and the salability of their property discreetly:
Similar to reason #1, discretion is the priority for them. Some sellers are uncertain if they can get the price they want for their property and they don’t want to risk anonymity in order to find out. Ironically, the only way to really test the market is to list it via the MLS. Often these sellers have a specific price in mind and if it’s met, they are willing to sell.
3. They want a specific broker to handle both sides of the transaction:
Some sellers have had bad experiences with other brokers and have a sole, trusted broker that they prefer to work with. They usually feel this specific broker has the contacts to sell the property and the capability to see a transaction through successfully.
4. They have a specific type of property that requires a specific buyer:
Some sellers feel that their property requires a buyer with specific capabilities to perform: finances, experience with fixers, experience with overcoming code violations, etc. Sometimes they seek buyers with a specific intent: board and care operators, condo-conversion developers, etc. These sellers often want to avoid looky-loo’s and deal with specific brokers with connections to relevant buyers.
There are additional reasons why sellers prefer this approach; however, it’s always our primary recommendation to pursue a conventional strategy and utilize the MLS. While discretion is at risk by listing conventionally, you are more likely to yield the highest purchase price and do so in the least amount of time. We only entertain the pocket listing approach if the seller is insistent. Even though we advise sellers about the downfalls of being a pocket listing, there are still some who are adamant about using this approach.
If you’re thinking of selling and want to learn more about pocket listings and if this is the right approach for you, please feel free to get in touch. Also, if you’re interested in any pocket listings we may have on hand, please sign up for our Investors List in the form below, or feel free to call/email. Thanks!
