In the often complicated world of real estate transactions, real estate agents and other players in the know tend to throw around a lot of terms. The meanings behind this property terminology are not always intuitive to home buyers and sellers. Just the same, it’s integral to a satisfactory real estate transaction that you understand at least some of the terms being used. This includes the definition of a pocket listing.
What is a Pocket Listing?
"Pocket listing" is a term that comes from the United States real estate industry. It refers to a piece of property where the seller and real estate broker agree to sign a contractual listing agreement. In short, the agreement guarantees that the real estate broker will not place a home on the MLS and will instead only market it to their existing clients. There are two options when pursuing a pocket listing: this agreement is either considered an Exclusive Right to Sell or Exclusive Agency contract. As a result, a multiple listing system (also known as MLS) is never made use of, and it is also possible that the property’s advertising has been limited for a specific period of time agreed upon by both parties.
What Is an Exclusive Right to Sell Agreement?
Whenever a home seller hires a real estate broker to sell their house, a listing agreement is written up and executed to ensure everyone is on the same page. In a situation where the agreement is an Exclusive Right to Sell contract, the property is agreed not to be listed in MLS. This implies no agreement to work cooperatively with other brokers, although the hired broker does usually cooperate with other brokers anyway to share some of the total commission the seller pays when the house is sold.
What is an Exclusive Agency Agreement?
In the alternative, an Exclusive Agency contractual agreement delegates the right to sell the property exclusively to a sole broker. The house is once again not listed in MLS in order to help it sell and is still sold privately.
Why Use a Pocket Listing?
Reasons to want a pocket listing vary by seller, such as when the seller feels the need for privacy or discretion in their real estate transaction. In any event, a pocket listing is an option to consider if a homeowner seeks privacy in their real estate dealings and wants to put their trust entirely in a real estate broker to ensure the home sells successfully.