Hello. Welcome to Todd Miller TV. Today we’re going to talk about pocket listings. The question I get all the time is, “What’s a pocket listing?” Well, this is what it is.
A pocket listing is where the real estate agent who knows about a house coming on the market, maybe even has a signed listing agreement if it’s not in the MLS. Now the reason they’re called pocket listings is because a long time ago, before an MLS has existed, before the actual technology existed, they used to have these listing books and they just take copies of all the listings and put them in the book and they would put one in each office.
What agents would do is if they saw one they liked, they don’t want other agents to know about it. They would tear the sheet out, put it in their pocket. So they pocketed the sheet of paper that had the listing information so they can say, hey, I have a listing nobody else knows about. So I can sort of maybe sell it without anybody else competing. So today how that works is agent goes to a house and gets a listing agreement signed. Maybe takes a couple of days to put in the MLS. They know about the listing before anybody else.
So they can maybe have an open house, put a sign out and get a buyer in there, sell the house themselves, not really give another agent the chance to sell that house.
So now, not talking about whether it’s good or not for the client or whether – whatever it is. But the truth is pocket listings exist out there. A lot of listings transfer, a lot of house transfer never had to hit the MLS. The reason is, is because sometimes people want to sell their house. They don’t want to list it. They just want someone to help them find somebody so they will call up an agent and go, hey, I just want to sell my house. I don’t really want to list it in the MLS. Well see, I’ve got this guy. Send them over. Make a deal happen. It never hits the MLS. The deal happens.
So when you see those MLS numbers, that’s not all house sales. That’s just all house sales through the MLS. There has sort of been this push to get like all real estate data into one socket, one like data format that can just be used by everybody and that’s never going to happen. It’s too complex. There’s not a real – like there’s not a problem being solved by doing that. There’s not an existing problem.
Real estate is local. It’s complex and there’s a lot of factors that go into it. This isn’t eBay or Amazon and I think that sort of trying to homogenize a real estate market, make it like eBay and Amazon, that’s never going to happen. I don’t see it happening. There’s too much resistance to that and so with that in mind, pocket listings if that ever did start to go that direction, the pocket listing will always prevent that from being a perfect system, sort of perfect information.
So anyway, that’s all – when you hear the word “pocket listing,” that’s all that is. Where you really see it a lot is not really in residential but in commercial, apartment buildings, office complexes and things. A lot of times, those people don’t want any marketing. They just go to an agent and go, look, find me a client but I can’t tell my tenants I’m selling. I don’t want to tell – if I’ve got the apartment building or an office building, they don’t want people to know they’re selling because maybe people get scared and want to leave or they can’t get a new tenant. But it’s usually not a big deal. Just people rebalancing their portfolios. So what they do is they go to an agent. Hey, just get me a buyer. The person will call around. Hey, I’ve got a building or they will wait for someone to call and say, “Hey, what have you got?”
I’ve got this apartment building. He wants three million for it. Who knows? So you see pocket listings in those industries but you just see them in residential.
So when you hear the term “pocket listing,” that’s exactly what it is. Anyway, that’s my update for today and hope to see you on another video. Thanks.