How To Take Advantage Of Pocket Listings

Investing in real estate is a numbers game; there’s incredible value to be had in quantity. That’s not to say quality isn’t important, but rather that there’s an inherent value associated with volume. The more leads investors bring in, the more likely they are to close on a deal. Therefore, investors intent on increasing their chances of landing a deal should exercise every means of finding a property at their disposal, not the least of which includes pocket listings. If you are looking to increase your lead volume, these exclusive listings are a great complement to every investor’s acquisition strategy.

What Is A Pocket Listing?

Otherwise known as an exclusive listing or off-market listing, a pocket listing is a property that is currently up for sale, yet hasn’t been advertised on any major outlets. More specifically, off-market listings are deliberately left off the Multiple Listings Service (MLS), and typically anything else resembling an advertisement portal. That said, the definition of a an off market listing is ambiguous to say the least. While the definition of an exclusive listing suggests a lack of advertising, it is possible for some selling agents to downplay their marketing efforts, as opposed to ignoring them entirely. That means you may find hints of a quiet listing on sites like Zillow and Redfin. Therein lies the appeal of pocket listings to real estate investors: the inherent absence of outside attention. The lack of advertising suggests fewer people will be interested in the subject property, let alone know about it.

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How To Find Pocket Listings

Due to their deliberate attempt to remain private, quiet listings have developed a reputation for “playing hard to get.” The absence of pocket listings from the MLS makes them harder to find than their traditional counterparts, and rightfully so: the purpose of an exclusive listing is, after all, to remain private. It is worth noting, however, that while more difficult to locate, it is entirely possible for today’s investors to find exclusive listings on their own accord. Here are a few of my favorite strategies to find off-market listings:

• Expand Your Network: Real estate investing is a people business. I wholeheartedly subscribe to the theory that it’s not about what you know, but rather who you know. It is, therefore, in your best interest to expand your network, which should inevitably expand your opportunities. The more people you know with their ear to the ground in your local market, the better. At least one thing is certain: the more people you know in the real estate industry, the more likely you are to run into someone that has information on a pocket listing.
• Partner With A Local Real Estate Professional: When you make an attempt to expand your network, place an emphasis on seeking out local real estate professionals. Realtors and agents currently working in the neighborhood you hope to find an off-market listing in will most likely demonstrate an intimate, working knowledge of the area. It is reasonable to assume they either know of a quiet listing themselves or know of someone that does.
• Remain Active In The Industry: I maintain that proactive investors have the best odds of finding a pocket listing. To ensure you are maximizing your chances of finding a quiet listing, get active in your community and participate in every industry-related event you can think of. Attend open houses and visit local investor meetings with the intention of making new contacts. More importantly, don’t be shy; you won’t get what you don’t ask for. Do not hesitate to let your intentions be known. When you are at an event, ask if anyone knows of any exclusive listings in the vicinity.
• Builders & Contractors: I highly recommend staying in touch with a number of trusted builders and contractors. There’s a good chance the homeowner with an off-market listing hired someone to do at least a little work on the property; if that’s the case, the person responsible for making upgrades may know of the sale before anyone else. What’s more, contractors and builders tend to network very well. If you can align your services with the right contractors, you may be given insight into the projects that are expected to turn into exclusive listings in the near future.

Benefits Of Pocket Listings In Real Estate

There are several reasons a homeowner may choose not to list their property on the MLS. First and foremost, there’s an entire contingent of sellers that would prefer to keep the sale of their home private. For whatever reason, there are countless individuals who may not want the public to know their home has been placed up for sale.

“Some people don’t want the general public to know they’re selling, or don’t want to have pictures of the insides of their homes all over the internet—especially celebrities,” explains Realtor Nathaniel Pitchon Getzels of Berkshire Hathaway HomeServices in Los Angeles.

Those less concerned with privacy, however, may covet the idea of a pocket listing for an entirely different reason. Many sellers, for that matter, may exercise their right not to list their home as a means of testing the market. Done correctly, an off-market listing could actually help sellers land on a more competitive price point before they actually list it on the MLS.

Last, but certainly not least, off-market listings are often used by those that aren’t entirely sure they want to sell in the first place. Those “on the fence” about whether they want to sell or not may choose an exclusive listing strategy to make their decision easier. There are plenty of homeowners that don’t necessarily want to list their homes, but would consider selling if the right opportunity presented itself.

Homeowners aren’t the only ones that stand to benefit from a quiet listing. Real estate investors that know how to find exclusive listings could find themselves with a significant advantage. Not surprisingly, pocket listing homes should result in considerably less competition. Investors fortunate enough to come across an off-market listing shouldn’t have to compete with too many potential suitors. Whereas traditionally listed homes may receive upwards of 20 offers in competitive markets, the process of real estate pocket listing will reduce the amount of competition, effectively making it easier for a savvy investor to acquire the deal.

Pocket Listing Tips From The Pros

Pocket listing real estate advice will certainly differ from professional to professional, but there are several tips I would consider to be universal. Below you’ll find a list of my favorite off-market listing tips to make your experience more enjoyable:

• Subsequent Deals: I highly recommend speaking with the off-market listing’s representative to find out whether or not there are more deals to be had. It is entirely possible the Realtor or agent knows of additional listings that aren’t on the market. Better yet, they may have some deals of their own waiting in the wings. If you play your cards right, you may be able to capitalize on multiple properties from the same individual.
• Pay Attention: By nature, exclusive listings are hard to find. However, an investor with a keen eye may be able to identify exclusive listings by driving around their own neighborhood. Pay special considerations to anything out of the ordinary. If you are familiar enough with the area, it should be easy to identify homes that are starting to receive more attention than normal.
• Bandit Signs: There are a number of reasons owners may use a quiet listing strategy to sell their home, but they all have one goal in mind: to sell the home. When all is said and done, a exclusive listing is intended to sell a property. That said, I recommend letting people know you are interested in buying. Place bandit signs around the neighborhood you intend to work in and you may find the owner of a quiet listing contacting you.

Summary

While pocket listings may be more difficult to locate than their traditionally listed counterparts, they are far from impossible to uncover. With a little patience and the aforementioned strategies, investors can increase their lead flow through the use of pocket listings.

Key Takeaways

• While pocket listings are a little harder to find than traditional listings, they are no less a viable source of deals for today’s resourceful investors.
• Investors that know how to find pocket listings will contribute to their lead generation strategy in a meaningful way.
• Pocket listing homes is a technique sellers will use to keep their impending sale private.