There’s nothing worse than seeing the perfect house and finding out it’s already the object of a bidding war. As mortgage rates remain high and inventory remains low, the competition for homes is only getting more intense.
If you’re looking for a house and you’ve been frustrated at how quickly they sell, or you’re struggling to find houses that meet your needs, there’s probably an untapped resource you can take advantage of: pocket listings.
What’s a “pocket listing”?
A “pocket listing” (sometimes called an “off-market” listing) is a property for sale that isn’t listed in the Multiple Listing Service (MLS). That means that while a real estate pro is actively trying to sell the house, it isn’t easily discoverable and doesn’t show up when people search for available properties. There are two main reasons real estate agents do this: One, if the seller doesn’t want their property advertised on the MLS for their own reasons, and signs an opt-out form; and two, in order to sell the property to someone in their network, either because they know it’s the ideal property for their needs or because there’s potential for a higher commission because there won’t be another agent involved.
Pocket listings are somewhat controversial in the real estate world. Although they’re 100% legal, the National Association of Realtors (NAR) issued a rule in 2019 that requires licensed real estate agents to list a property on the MLS within one business day of “marketing a property to the public.” It’s still perfectly okay to market the property to other agents or to a specific potential buyer without listing it on the MLS, however, so pocket listings endure—and agents have a few tricks they use to stay within the letter of the NAR rule while getting the advantages of a pocket listing.
This means that there’s a relatively small but crucial supply of homes for sale that you might not see if you’re searching online or even if you’re working with an agent, because they’re not yet listed on the MLS. But you can still find them, and that means you can get in early and make an offer before the whole world stampedes in to snag your dream home out from under you.
How to find pocket listings
Finding pocket listings can take some legwork. But if you’re in a tight market and have a very specific area you want to buy in, that work can pay off big time.
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Contact local agents. If there are pocket listings in a neighborhood, a local real estate agent is probably involved. Contact the agents in the area and ask if they have exclusives or off-market listings in the area you’re targeting.
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Search online. Zillow has a “coming soon” category where agents can list off-market properties up to 30 days before they’re officially listed in the MLS. This is often used as a way to drum up interest in the property, but it also affords you an opportunity to make contact before the listing goes wide.
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FSBO. Zillow and other real estate listing sites have For Sale By Owner (FSBO) sections, and homeowners going the FSBO route also post on places like Craigslist or For Sale By Owner. These are off-market listings even though a real estate agent isn’t involved.
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Homeowners. One last option is to contact the folks already living in your desired neighborhood and just ask them if they or someone they know is selling or thinking of selling their house. This is probably your least efficient option, but it might turn up a lead.