Sometimes sellers ask about treating their property as 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 quietly to other agents and their buyers I am usually only showing the property by appointment. It’s not entered into the mls and there are generally no open house showings.

And yes, of course there are benefits:

Perhaps the sellers don’t want to do, or pay for the prep involved in bringing the property to market. As their agent, I want the property to show its best and sometimes that means that sometimes the sellers are looking at packing and placing their items in storage, moving into a temporary home while new carpet, new paint, staging and repairs are done to their property. While I manage all the vendors and work and can even bring over a crew to pack their things up, it’s a very intrusive and disruptive process. Then during the marketing period, there’s open houses, evening showings, private showings and 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 thru the home. They want to sell, but they don’t want the whole rigmarole of the sales cycle. 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.

For the buyers a pocket listing can be an opportunity to buy without as much or any competition. Some people think they will get a better deal with an off the market purchase, but I like to make it clear that I think they will not get a “steal”. They are likely to get a fair deal and not to have to go up against multiple offers.

Of course sometimes, the seller wants too high of a price and no buyer sees fit to offer them what they want. It could in fact be the listing agent’s strategy to test the waters with the pricing without having to create a history in the mls of price reductions. That way, if it doesn’t garner any offers at that price, perhaps the owner will decide that they will not sell, or become more realistic about the asking price.

As agents, we all hear about and see pocket listings. My favorite this week was located in Miraloma Park on Molimo at Myra. It’s a mid-century home with all three bedrooms on one level. Both the bathroom and the powder room are remodeled. There’s hardwood floors, a spacious kitchen, living room dining room and two car parking in the garage. There’s a great deck from which to enjoy the yard. Priced at $829,000.

Tags: Miraloma Park, Pocket Listings

This entry was posted on Saturday, May 8th, 2010 at 6:16 pm and is filed under real estate san francisco. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.