Redondo Beach Pocket Listings, Off Market Sales and other Urban Myths

Sometimes I have to really laugh when I hear what other Real Estate Agents say to buyers to try to get them as clients. The latest nonsensical come on is the myth of the "Pocket Listing" and Off Market Sale. So, while writing about this may not win me any fans in the agent community, here we go. Let's try to keep the "real" in Realtor!

While there's no doubt that there are more properties being sold off market than normal, there's also no doubt that most of the Redondo Beach property listings make their way to the MLS eventually and are available to the general public. for sale. Why is that? Because the way for a home seller to get the highest price is to have the most exposure, not the least. I can tell you from experience that what Sellers want is multiple offers and bidding wars. Pretty much the exact opposite of what Buyers want.

As agents we often know of properties that will be listed before they hit the market. Those could be future listings that we have interviewed for or are waiting for the Sellers to be prepare to be placed on the market. Or they could be properties that we find out about through our networking groups, fellow agents or company. And you know there are instances where those same properties might be sold before they hit the market and then put in the MLS "for comp purposes" which is really agent speak for "I want to boost my stats" and bragging rights.

For example, right now in North Redondo Beach I know of 4 Townhomes that may be listed (with me I hope) in the next 30 days or so. And a SFR in Mar Vista. And an ocean view SFR in Rancho Palos Verdes. And a townhome in Long Beach. Are those truly "Pocket Listings"? Not really. They are potential opportunities I am aware of. (But call me anyway if you are interested, lol).

Off market sales are hard to come by unless a) the agent you are working with just happens to get a listing that is exactly what you want or b) the agent you are working with is well connected to other agents in the area and tends to hear about listings before the general public. Can that work to your advantage as a buyer.? Sure. Is it a sound strategy? Not so sure. Are those "Pocket Listings" or just agents smoke and mirrors? You decide.

I don't want to imply that there aren't valid off market sales and/or pocket listings which may not be the same thing. Or that there aren't valid reasons to list a home in the MLS (or that every agent is doing this).

In fact, last year about 20% of my sales were "off market". But these were not properties that you, the general public would have gotten a shot at either. Let me explain.

In one instance I sold a rental condo owned by a client of mine to his tenant "off market" and later put it in the MLS to record the sale. Why wasn't it listed in the MLS first? When my seller weighed all the facts it just made the most sense to sell to the tenant who was already in place.

Another private off market sale involved the seller's family situation that was way too personal and involved to get into in this format but suffice it to say that it was best handled by having the buyer in place and one Realtor handling both sides. As a fully arm's length public transaction it may have been a disaster.

In both those instances the Seller actually may have gotten a higher price with more public exposure. Which brings me to my point about why selling without 7-10 days on the market and being in the MLS and all the public websites is not in the seller's best interest.

In fact, the revised C.A.R. listing contract actually advises sellers of such and has them initial a separate paragraph acknowledging this. What you need to know as a buyer is that a true "Pocket Listing" will have a signed listing contract as well as an MLS waiver form.

So the next time you are at an open house and the agent tells you there are "Pocket Listings" the best response should be "Great, let's go see some now." Or, here's my agent's contact info. Let her know and we'll look at it.