This may be an observation about human nature more than anything else, but most buyers that I work with always ask to be notified of any new listings that I may know of before it goes on to the MLS. “MLS” by the way stands for Multiple Listing Service and is the centralized system that provides information about all listed properties. You can actually look for listings yourself based on specific criteria on the MLS which can be accessed from a link on the left hand side of my web site. This is a fairly recent development as it used to be that only professional realtors had access to the system. I digress, but the point is that with information in this industry becoming more pervasive so has competition for prime properties as they come on the market. Why do most people ask about these unlisted properties? Why, to get a good deal on a great property of course! Without competition there is always the hope/chance that something special will pop up and a good price can be negotiated.
Defining the Pocket Listing
There is actually a mechanism in our business to market properties that do not go on to the MLS and that is called a “pocket listing”. In short pocket listings are when there is a signed listing agreement between the broker/agent and seller to sell a property but without the exposure through the MLS and usually without any other exposure except word of mouth. As a percentage of all listed properties it is minuscule, but that said I am aware of a decent number of pocket listings in prime communities here in Marin. So why do sellers opt for this type of listing? The reasons vary, but the listings typically apply to higher end properties which involve more complex transactions. Reasons why sellers might choose to go this route include;
- Testing the market value and interest level of the property.
- Sellers might not be 100% ready to sell but if the right buyer is ready, willing and able they would.
- There may be a strong desire for privacy and a quiet sale.
- Do not want unqualified buyers wandering through their home .
- Sellers might be in the process of looking for a home to move to-but not yet found one.
Weighing the Upside and Downside for the Seller
Ultimately, the seller must decide if exclusion from the MLS is in his/her best interests and does not limit exposure on the market. Sometimes sellers ask about treating their property as a pocket listing. People have often heard the term, but don’t always understand either the benefits or downside to having their property sold off the market. When a property is marketed directly to other agents and their buyers I am usually only showing the property by appointment and there are no open house showings.
There are benefits. Perhaps the sellers don’t want to do, or pay for the preparation work involved in bringing the property to market. As their agent, I want the property to show its best and sometimes that means the sellers are looking at some extensive and potentially expensive work to prepare the property for market including; packing and placing their items in storage, dealing with both structural and cosmetic repair work, and staging for their property. Then during the marketing period there’s personal disruptions including multiple open houses a week, evening showings, private showings and often people peering into the windows and ringing the door bell because there is a for sale sign on the property. Or perhaps, it’s a couple with young children and they just can’t tolerate that process, or a seller who just wants to quietly sell without all the neighbors knowing or coming through the home. They want to sell, but they don’t want the public exposure that comes with the marketing of the property. An off the market sale or pocket listing can make sense for them.
What’s the downside? Well, I always tell sellers that they will never know what the property would have sold for on the open market. There’s always a question as to whether they received the highest and best price. But each property sale is a snapshot in time, and perhaps the difference would be small. But if the home had been properly prepared and marketed, would the seller have received a better price? They will never know, and they need to be okay with that. It’s a trade off, but if it works for the client, that’s fine.
So How Many Are Actually Out There?
Let’s start with the top level numbers. In all of Marin County there are 1,095 single family homes currently listed. The actual number of pocket listings is not a known quantity as different firms have different ways of communicating and tracking them. Many firms have no way of tracking them. At Pacific Union we have a means to track internal pocket listings and currently we are tracking 33 pocket listings, which equates to 3% of the market. The average listing price comes in at a whopping $2.7m, which backs up my earlier point about these being typically higher end properties in higher end communities. In the mix is one $10m property with a couple $7m properties right behind. Below is the breakdown by community for the pocket listings available:
- Belvedere: 1
- Fairfax: 1
- Kent Woodlands: 2
- Kentfield: 3
- Larkspur: 1
- Mill Valley: 8
- Novato: 2
- Ross: 4
- San Anselmo: 2
- San Rafael: 3
- Sausalito: 1
- Tiburon: 5
So if you are interested in learning more about pocket listings, feel free to contact me and I’ll be happy to explain more and discuss these unlisted opportunities and your real estate needs. I am always grateful for your referrals.
Top Producer
Pacific Union International Real Estate/Christies Great Estates
415-609-4473
skramlich@pacunion.com
www.sharonkramlich.com
