Selling your house can be a big decision, and figuring out the best way to do it is crucial. Many people turn to the Multiple Listing Service (MLS) because it exposes your property to a large audience, potentially fetching you a better price. However, pocket listings, where your home is marketed privately by a broker to a select group of potential buyers, offer an intriguing alternative.
In the past, pocket listings were a common strategy until the National Association of Realtors (NAR) implemented rules in 2020 that restricted their use among its members. This decision aimed to ensure properties were widely available on the MLS soon after being marketed to the public. This move was seen by many as an attempt by the NAR to maintain control over real estate listings, which some felt overstepped the bounds of their authority.
Despite these restrictions, pocket listings still exist. Brokers might share listings within their firm before going public, maintaining some level of privacy and exclusivity. This method allows sellers like myself to test the waters with a high asking price without public scrutiny. In 2017, I opted for a pocket listing after a disappointing experience on the MLS five years earlier. This time, I aimed high and was pleasantly surprised when an offer came in well above my aspirational price, ultimately closing at a satisfying $2,745,000.
This personal success story showcases the advantages of pocket listings, especially during uncertain times like a pandemic when market dynamics are unpredictable. If you’re in no rush to sell, trying a pocket listing first might spare you the public exposure and potential lowball offers that come with listing on the MLS. It keeps your days on market count at zero, protecting your negotiating power.
On the other hand, the MLS still offers the broadest exposure. If your home sits on the MLS without attracting a buyer, it can become stigmatized as a stale listing, potentially leading to lower offers. This makes selling not just financially taxing but emotionally stressful too.
The debate between using a pocket listing or the MLS is nuanced. If the NAR revises its stance on pocket listings, sellers will have more flexibility to choose how they market their homes. For now, leveraging a ‘coming soon’ strategy or an internal brokerage listing can provide a good middle ground, combining discretion with a degree of public exposure.
Regardless of the method you choose, once your home sells, it’s wise to handle the proceeds carefully. Diversifying your investments, whether in real estate or other markets, can optimize your financial return. As I did, investing in platforms like Fundrise and diversifying across stocks and bonds can secure your financial future. Each selling and investment strategy has its merits, so consider your personal circumstances and market conditions before deciding.
