3 Reasons Pocket Listings Harm Senior Sellers

Recently I came across a house for sale on Facebook.  The video highlighted the home’s features well and I knew instantly the home was perfect for one of my buyers.  The challenge was that I could not find the house in the multiple listing service (MLS)!  I’m a senior and my memory isn’t the best but I knew the Facebook post was recent.  I decided to dig further and found the house was under contract!  This is not unusual for a hot market like Northwest Indiana.  Houses are selling within hours.  And while this house was placed on the MLS within the deadline, the term “pocket listing” briefly came to mind.  This senior citizen tip is 3 reasons pocket listings can harm senior sellers.

A pocket listing is a term used in real estate to describe property for sale that is not on the MLS or advertising is delayed.  Pocket listings are common when inventory is low.  Some pocket listings are legit.  For example, a seller may sign a form opting out of marketing on the MLS for privacy or security reasons.  But when real estate agents withhold a listing or delay placing it on the MLS for personal gain, the pocket listing can harm the seller and the market.

3 Reasons Pocket Listings Can Harm Senior Sellers

1. Buyers do not get a chance to compete for your home. When an agent keeps a listing quiet and only shares with a select group, the seller loses out on the competing buyers for the highest price.

2. The sale price impacts the comparative price for other sellers. If an offer is accepted before the home is marketed on the MLS, the price may be lower than the market would pay.  This lower sale price is used for comparables for other home sales.

3. Your rights may be violated.   Real Estate Agents have a fiduciary responsibility to their client.  When the listing agent finds a buyer without properly marketing your property, it may be to keep both sides of the commission.  This clearly violates the Realtor’s© Code of Ethics and Indiana law.  The Code of Ethics and Indiana law mandate agents act in the best interest of their client.  If the intent of the pocket listing is to benefit from both commissions, the agent violated the fiduciary responsibility.  This violates trust.  Also, representing the seller and a buyer places the agent in a limited agency role.  Limited agency lessens the negotiation position for both sides.  While legal, both buyers and sellers must agree in writing to allow limited agency.

When you sign a listing contract with a real estate agent in Indiana, you allow marketing of your property on the MLS.  Senior sellers can sign an opt out form keeping your property from the MLS.  If you choose to market on the MLS and think your rights were violated, ask your agent where the lead came from.  If the agent found the buyer, ask how long your property has been on the MLS and about the limited agency agreement.  Address your concerns with your agent or the managing broker.  In the end, you have control of the price you will accept.

Are you a senior seller or caregiver who needs help moving?  Call me today at 219-315-6569 to help you move on faster and with less stress!

For more tips on real estate, aging-in-place, and not outliving your money, request a copy of our free book, The Northwest Indiana Guide for Seniors.