- Real Estate
Hot Real Estate Market Prompts Rise in Pocket Listings
Washington's Most Expensive Homes Sometimes Sold by Word-of-Mouth
Pocket listings for real estate are up significantly in the Washington area recently amid a hot seller’s market and low interest rates.
Pocket listings refer to properties that are not listed publicly, only through word-of-mouth among a small number of real estate agents or a select group of people.
Typically they are used to protect the privacy of celebrities selling expensive houses when they do not want large numbers of strangers walking around their homes.
More recently, pocket listings are used to produce quick sales, according to a report by The Legal Forum (www.legal-forum.net). Some sellers believe they do not need real estate ads when the Washington area’s strong demand for housing makes it easy to sell a home.
Although pocket listings are hard to track statistically, the Washington area’s listing database, MRIS, gives circumstantial evidence of them. The percentage of homes that spent only one day on the MRIS listing before being sold rose to 8.5 percent in the first eight months of this year. Five years earlier, only 6.7 percent spent one day on the MRIS listing.
Pocket listings also are controversial.
Some real estate agents say sellers might not get the best price if they fail to explore all their possibilities through advertising.
There are no laws that ban pocket listings but real estate agents must still obey their fiduciary duties required by the region’s real estate commissions.
Among the duties is that real estate agents must obtain written consent from sellers for pocket listings. The sellers also must be informed that the real estate agents might seek buyers from among other agents in the same firms, also known as dual agents.
Another risk for agents is that they could be accused of violating fair housing laws if they fail to seek buyers among an ethnically diverse group of people.