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Thursday, March 8, 2018

Check the pockets!

I was with a neighborhood group recently. As is often the case, someone asked me about a particular house that had recently sold. Their comment was, "That house sold so quickly! It was there and then it was gone!" My response was, "Well it was exempt for several months, so it probably didn't go as quickly as you thought." It was then she asked me, "What's an exempt listing?"

A pocket listing or exempt or private listing is a real estate industry term used which refers to a property where a broker holds a signed listing agreement or contract with the seller, but it is private and no public marketing has taken place. It has never been advertised. If has been entered in the multiple listing service (MLS), it's in the private section which is only available to be seen by other members of the MLS.

The primary reason a listing is exempt, is that the sellers are not ready for the house to be photographed or advertised. They are getting the house ready -- making repairs, etc. A second reason has to do with timing. Perhaps the sellers are building or remodeling a new home -- they are willing to show their existing house to pre-qualified, "real buyers", but that's about it. They'll put it in the MLS when they are really reading to move.

Another reason houses never come on the market is a seller's need for privacy or security. Often the listings of the homes of celebrities or public figures are kept private. The sellers don't want curiosity seekers wandering through their homes. They want to make sure that only motivated, financially qualified buyers see their home.
There are also some marketing strategies associated with exempt listings. Pocket listings can be very appealing to buyers who seek exclusive opportunities. It really is in the best interest of a buyer to be working with a local agent, who knows what exempt listings are available and not visible to the public... these buyers have an advantage on seeing the homes ahead of the pack.

Many full-time agents have knowledge of pocket listings in their own office or in other offices of their own company. There are some companies which list property as pocket listings for a short time before entering it into their MLS sometimes with the implicit idea of getting "both sides of the deal"  i.e., shopping the listing within their own firm. 

A real estate company which is not a member of any MLS may have pocket listings, but may still be willing to cooperate with other real estate professionals in the sale of their listings.
So buyers, don't shortchange yourself by only looking at real estate sites -- there may be a whole other group of homes for sale that only an agent can share with you.  Be sure to check the pockets!

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