I weighed in on the exclusive real estate practice of “pocket listings” with the Philadelphia Inquirer, arguing that the tactic blocks transparency and fair competition in the market. View the full article here.
Are real estate sellers truly getting the highest and best value for their homes? As low inventory has been an issue in the South Jersey/Philly area and nationwide for the past year or so, some Realtors have relied on tactics to increase their income — at the expense of sellers.
A marketing technique advertising a property is “coming soon” is meant to create excitement around a new listing. Through this practice, a Realtor posts the public notice and then schedules the first public showing seven to 14 days after the teasing began. The theory is to create excitement and demand. And by the time the home formally opens to the public for showings and goes live in the MLS, everyone should have had a fair chance to see the home and then make offers. It sounds like a good idea.
Unfortunately, some Realtors used the techniques to get their buyer in first before the home was open to all buyers in the market, pushing homes to go under agreement before they ever hit the general market. Was this truly in the best interest of the seller — or was it in the best interest of the agent?
Common sense says the more buyers you have interested, the greater the value and the best terms the home will bring. Why would you only allow 10 buyers to see your home when you could expose it to 100?
It doesn’t make any sense. The more demand there is for something, the higher the price will be.
As a listing agent who helps people selling their homes, I have a fiduciary responsibility to sellers: to obtain the best price and the best terms. By only allowing your house to be shown to a select few, I would be violating this responsibility giving a few agents I work with an advantage before the entire market can see the property and make their offers.
The National Association of Realtors and Bright MLS heard the complaints from many Realtors who said their buyers never had a chance to see or make an offer on the new listing. Under Bright MLS’s new policy to protect sellers, the first time a new listing is marketed in any way, the agent has one day to turn the listing into the MLS. The majority of professional Realtors I know of have welcomed this policy, as it allows everyone to do what the sellers have hired them to do: get the highest price with the best conditions in the shortest amount of time.
While there may be some legitimate reasons to advertise to a select group, by and large, pocket listings don’t serve anyone as compared with the larger population of buyers that would yield the seller much better offers and prices. The new Bright MLS policy is a good step toward doing away with the unnecessary practice of pocket listings altogether.
Anne Koons is an agent for Berkshire Hathaway HomeServices Fox & Roach, working for buyers and sellers in Camden, Burlington, and Gloucester Counties and Philadelphia.
