The Pocket Myth…the new buzz to get your business
With inventory tight, one of the go-to lines sales agents use in trying to pick-up business is that they or their company “know about all the pocket/off-market listings”. Though most brokerages (including Partners Trust) will state that off-market sales accounted for over 20% of the sales in some zip codes in 2015, a deeper look into the numbers shows these numbers are inflated.
Some of those sales were properties that didn’t originally sell at a higher price when they came on the market earlier in the year. Another portion may have not been on the MLS but were marketed to all of the agents which in essence is exposing the property to the market.
We are not saying off-market sales do not happen. In fact, we have been involved in a handful of them over the past few years. They just do not happen at the frequency that is being told to buyers.
Another factor to remember is that most of the time, the seller in an off-market transaction will want a premium price along with generous contract terms they would get in a multiple offer to be comfortable they didn’t undersell the home by not fully exposing it to the market. A buyer has to be comfortable paying a hefty premium. Also, most reputable agents have clients who are willing to sell if someone is willing to pay 15% above market…but is that really a legitimate pocket listing?
It is important to have an agent who has good relationships in the brokerage community and is aware of the handful of legitimate pocket listings that are competitively priced. However, based on what we see and hear from, it is not happening at the level that is being marketed to potential buyers.