What is a Pocket Listing?

If you are thinking of selling a home, there are options to consider. One of the possibilities is a sale without the home or property coming on the market. This is called a “pocket listing,“ as in it stays in your pocket rather than coming out in the open. There are pros and cons to this approach.

Real estate is a market, just like stocks, commodities, or even retail goods. In the same way that every day the stock market opens and prices fluctuate based on available financial data, news, and even emotions, so does the potential market and price of homes. As we’ve discussed in other places, demand on the part of potential buyers, IE: the market, that determines the price at which a house will sell.

In a pocket sale, the house never comes to market. A common example of how this might happen: a neighbor hears you are planning to sell your house, and they hope to buy it for a family member. For many sellers this is a great solution: they get the price they want quickly without any of the stress of preparing their home for market, staging, dealing with showings, or extended negotiations. In other scenarios the decision can be sentimental, say in the case of selling a family home as part of an estate sale, where they would rather not have strangers wandering through “mom’s home,” and want to complete the sale quickly.

So what’s the downside? Fear of the unknown. The best possible scenario for a seller is to have multiple competitive offers, driving the price as high as the market will bear. This can’t happen if a house never reaches public awareness. It’s entirely possible that you could make more in the pocket listing, but you’ll never know the opinion of the market. There can be really good reasons to go this route and as long as you as a seller are cognitive of your decision, no one should question your judgement.