Private, or pocket, listings are all the rage at some real estate brokerages these days, but does the practice benefit (or harm) buyers and sellers? Here’s what you need to know.
Defining the “private listing”
A private exclusive listing is a sale that can only be marketed within a real estate brokerage. The property can’t be listed on the brokerage’s website or any other real estate sites. It can’t be advertised, marketed through emails, ads or flyers, or even have a for-sale sign. The only way to market a private exclusive listing is to share it with agents within the brokerage, who can then share it individually with their clients.
Who would want a private listing?
Celebrities, movie stars, ultra-wealthy individuals who are selling properties that only a very select few people could afford may want to limit the number of people who can see their home. But even then, it’s not really in your best interests, and there are ways to overcome privacy concerns with appointment-only showings and a required pre-qualification letter to name a few.
How do open market sales benefit home sellers?
It’s the law of supply and demand: the more people who know about your home, the more likely it will sell quicker and for more money. A Bright MLS study showed homes sold for almost 17% more and nearly 3X faster than those marketed as private exclusives.
What about buyers—do private listings affect them?
In markets like ours today, where inventory is low, private exclusive listings are particularly harmful to buyers because it limits their options even more. They may have had interest in that house down the street, but not knowing it was available, they missed out. Likewise, the sellers could have earned more money if everyone interested in their home knew it was on the market.
How about for properties that aren’t quite ready for the market?
In most markets in the Mid-Atlantic and Northeast, homes can be placed in a “coming soon” status for up to 21 days. This gives the homeowners an opportunity to let people know their house will be available while they continue to prepare it. Realtors and buyers can see these properties in the multiple listing service, although they cannot be shown in person to prospective buyers until they are officially for sale.
Where can I learn more?
Watch our animated short, Fight for Honor, for more myths and facts of the private exclusive.