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November 6, 2008

Pocket Listings Get Popular

Now that our San Francisco market has softened, sellers and the listing agents they hire are trending toward a new strategy: pocket listings. This is a listing that does not get advertised or put into the Multiple Listing Service, and is only marketed to agents in a quiet way. Pocket listing properties are only typically shown by appointment, and there are no open houses or broker tours.

Pocket listings are a great way to test the waters in a non-public way. If the property doesn’t sell at the seller’s desired price, well, the public never knew about it, and the seller can evaluate whether to move ahead with a regular marketing plan—at a potentially reduced price.

Over the past week, I have been privy to at least five pocket listings. One was for a 2BR house in Upper Noe Valley for which the seller wants $1.4M. This seemed like a very high price for today’s market. But pocket listings may also be a good opportunity for the buyer who writes an offer that may be less than the seller wants. The seller may initially reject the offer, but could come back to the buyer later, and a mutually acceptable price and terms may be worked out.

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