Some real estate brokerages promote their ability to sell homes privately— a practice commonly known as a private exclusive, or pocket-listing. But does the practice serve buyers and sellers as well as a home sale on the open market?
What is a private exclusive listing?
A private exclusive listing can only be inwardly marketed within a real estate brokerage. It can’t be listed on the brokerage’s website, on other popular real estate sites, can’t be advertised and can’t have a sale sign outside. The only way to market a private exclusive listing is to share it with agents within the brokerage, who can then share it with their clients.
Why would a homeowner sell via a private listing?
If you’re a celebrity, or you own a massive estate that few buyers can afford, it might make sense to limit the people who can see your house. However, it’s not really in your best interests. To overcome privacy concerns, show it by appointment only or ask buyers to provide a prequalification letter.
With low inventory and homes selling quickly, does a private exclusive listing make sense?
Private exclusive listings are harmful to buyers when inventory is low because it limits their options even more. When properties are sold as pocket listings, sellers could miss out, too. Their brokerage sells a home within their own company—profiting off both sides of the commission. Meanwhile, the homeowners might have been able to sell for a higher price if more buyers knew about it.
It’s the law of supply and demand: the more people who know about your home, the more likely it will sell quicker and for more money.
In today’s market, with limited homes for sale and overwhelming demand, selling on the open market is in the best interest of sellers and buyers. As shown in a recent study from Bright MLS, homes sell almost three times faster and nearly 17% more when marketed publicly*—proof that any other approach puts you and your needs second to company profits.
If you’re thinking about listing your property, please contact a Long & Foster agent, who will always put your interests first. For more information, visit LongandFoster.com.
*Data Source – Bright MLS and Public Records. Public records data was pulled in May 2021 which includes records from March and April 2021, dependent on the county. 2020 Bright MLS Office Exclusive form required a signed acknowledgment from the agent and seller indicating they are requesting to sell the property in the office exclusive format.