“Pocket listings” in Charlotte? Well, yes. A practice that’s causing howls of complaint from real estate agents in some hot markets is picking up here.
Which leads us to the next question: What’s a pocket listing?
It occurs when an agent keeps a home out of the full multiple listing service. It’s in his pocket, if you will. Instead of posting the listing, he shares it with a private circle of fellow agents, who face less competition for commissions.
The complaints come from agents who’re not in the loop, of course, and seem to be loudest from markets heating rapidly.
There’s no way to attach a figure to the number of pocket listings, but Eric Locher, president of the Charlotte Regional Realtor Association, says he’s hearing the term more often. “We do see emails from fellow agents who say they have a pocket listing,” he said.
If the client wants a listing withheld from the MLS, there’s nothing shady or illegal about following the client’s wishes.
But if client thinks it’s being listed in the MLS but the agent holds it out, that’s clearly improper. “That’s a big problem for everybody,” Locher said, “but we don’t hear a lot of that.”
Locher, who’s with CottinghamChalkHayes, ticked off couple of reasons why a client might want to hold a listing out of the MLS.
Occupied rental homes can be tough to show, or the seller might not be ready to announce to the tenant that the home is on the market. A professional sports or business figure might want to protect his privacy. He might not want strangers tromping through just to say they’ve been there.
Both seller and buyer might think there’s potential financial value in a pocket listing, Locher acknowledges.
The seller might think he’ll get a higher price with an exclusive listing. At the same time, the buyer might think he’ll pay a lower price because showings are limited.
Locher thinks those perceptions are most often wrong. “We question whether it’s an advantage for anybody,” he said. “In realty, most people are best served by the most exposure.”
That makes sense.
Here’s another question that I haven’t seen addressed in the national real estate blogs and newsletters: How is the market going to set the price for a house if the market doesn’t even know the house is for sale?
Turns out it’s not just an idle question. Appraisers use recent, comparable sales to help set values on houses. Locher said appraisers tell agents that they don’t use sales that didn’t get full exposure. “They can’t use properties that haven’t been vetted through the MLS process,” Locher said. The arranged price might be above or below the price that would have been set by the full market.
That makes sense, too.
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