What Is a Pocket Listing in Real Estate Terms?

The real estate market typically advertises properties widely to attract potential buyers. While most homes are listed on public platforms, some transactions occur through less conventional methods. One such approach is a pocket listing, which operates outside typical public exposure. This method represents a distinct segment of property sales, differing significantly from standard real estate practices.

Defining a Pocket Listing

A pocket listing, often called an “off-market” or “private” sale, describes a property a real estate agent holds for sale without publicly listing it on a Multiple Listing Service (MLS). The MLS is a comprehensive database used by real estate professionals to share property information. Instead of broad public advertising, a pocket listing is marketed discreetly, primarily to a select group of potential buyers or within a limited network. This approach emphasizes exclusivity, limiting the property’s exposure to the wider market.

How Pocket Listings Operate

The process for a pocket listing begins when a seller and their real estate agent agree to this private arrangement. Instead of preparing the property for broad market exposure, the agent identifies potential buyers through their personal network, exclusive client lists, or targeted outreach. Showings and negotiations proceed without the general public’s knowledge, maintaining a high degree of privacy. The agent leverages direct communication channels and established relationships to connect the seller with suitable buyers, bypassing traditional widespread marketing efforts.

Motivations for Pocket Listings

Sellers often choose a pocket listing for various reasons, including a desire for privacy during the sale process. This method allows them to test the market discreetly without publicizing their property’s availability, appealing to high-profile individuals or those needing confidentiality. Some sellers also seek a quick, quiet transaction, avoiding the disruptions of numerous showings and open houses. For real estate agents, motivations include maintaining greater control over the sale process and working with specific, pre-qualified clients.

Regulations and Ethical Considerations

The real estate industry, including the National Association of Realtors (NAR), has established rules for property listings to ensure fair practice and transparency. The NAR’s Clear Cooperation Policy, implemented in 2020, requires that if a property is publicly marketed, it must be submitted to the MLS within one business day. Public marketing includes yard signs, digital marketing on public websites, or social media posts. This policy aims to provide broad exposure and equal opportunity for all buyers and agents.

The policy does not prohibit “office exclusive” listings, which are marketed solely within a single brokerage without public advertising. For such listings, a signed seller disclosure is required, confirming the seller understands and agrees to these limitations. Real estate agents are bound by a fiduciary duty to their clients, meaning they must act in the client’s best interest. This duty requires agents to provide comprehensive information to sellers regarding the benefits and drawbacks of limited exposure, ensuring the seller makes an informed decision.