What is a pocket list and why would the seller use one?

Is the bag list legal?

Bag listing is not illegal, but NAR (the country’s largest trade organization) does have a policy that if the seller requests one, its nearly 1.5 million real estate agents® members can accommodate external listings.

What is the Pocket List Policy?

According to NAR’s pocket listing policy, known as the “clear cooperation policy”, as of January 1, 2020, listed agents and brokers must submit listing to MLS within one day of selling property to the public. This includes any promotion or advertisement, such as flyers, yard signs or brokerage website displays.

The NAR Board adopted this policy to avoid the use of such lists “abuse of various limited exposure marketing strategies.” The MLS requirement is intended to encourage agents to cooperate in the interests of consumers.

The policy is also designed to curb pocket lists in the self-interest of real estate agents only. In addition to reducing visibility of the property, bag listing can also make agents more likely to represent both buyers and sellers, thereby increasing commission cuts.

Are there any exceptions?

Suppose Beyonce and Jay-Z sold $88 million in large Mansion at Bel Air. If these celebrities treat real estate lists like everyone else, they end up sending out a lot of financially ineligible and interstellar Looky-look-loos who just want to wander around the crib and take selfies.

But it’s not just the rich and famous people who might want this privacy. Think of a prosecutor or judge who tries to remain anonymous in a personal life, a politician or other public figure.

Wilcox, the team leader in her office, said one of her agents recently withheld the listing of MLS because the seller owns daycare business. They fear parents who publicly know their homes are for sale will worry that they leave the area and take their business elsewhere.

In these cases, the seller may choose to go on sale in bags. So, how does it work under NAR policy?

What is a “book” bag list?

For bagged lists, sellers must first express to their agents the list they do not want MLS to spread. The agent then must still submit the list to the organization and include the seller’s signature authentication indicating that they have refused the MLS service.

The list is then considered “office exclusive.” Listing agents can share information about the list with brokerage members and advance one-on-one between these members and clients who may be interested in the pocket list. Agents and brokers who violate NAR policies may face fines.

You are just marketing to a much smaller community of people. It is really shrinking your buyer pool and you are not very easy to get the highest dollar of property people seem to have already obtained these days. You may leave your money on the table.

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  Margaret Wilcox Real estate agent

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  Margaret Wilcox William Raveis’s real estate agent Currently accepting new customers

  • Years of experience 26
  • trade 1963
  • Average price point $401K
  • Single family 1618

Why bag lists are usually unpredictable

Much like publicity to do work, the more people know your property, the better. When you list foreign currency markets, these are some of the risks:

Limited visibility and property scope

Staying away from MLS can prevent thousands of agents and their clients from viewing your property and making an offer.

“You’re just marketing to a much smaller community of people,” Wilcox said. “It’s really shrinking your buyer pool, and it’s not so easy for you to get the highest dollar of the property people seem to be getting these days. You might put your money on the table.

Possibility of sales

While there is no centralized national data on unpublicly sold homes, a single MLSS report says more exposure and visibility equals better prices. A study of approximately 443,000 comparable home sales over the two-year period found that homes sold through MLS sold at nearly 17% higher than those sold on the market.

Double agents may be encouraged

On average, the national board of real estate agents is about 5.8%, which is usually calculated as a percentage of the price of the property selling.

Although the seller covers this fee, which is deducted from closing earnings, the listing agent cannot retain the full amount. Typically, the listing agent is shared with the buyer agent, and then the two agents share a portion with their respective sponsored brokers.

Agents who sell property to their private networks may have a greater chance of retaining the full commission, but it may also undermine their ability to negotiate on behalf of the seller.

Violation of the potential for fair housing

NAR said it enacted a clear cooperative policy, partly in order to provide equal access to all available properties that promote fair housing, under the requirements of the Fair Housing Act of 1968.

Researchers such as Elizabeth Korver-Glenn, a sociologist at the University of New Mexico, say that personal and private marketing can create racial barriers in the housing market, Racial Brokers: Housing Market and Apartheid in 21st Century Cities (Oxford University Press, 2021).

Fall towards local market data

Transparency in shared data is a valuable resource for pricing homes. Lesley Walker, deputy legal counsel for NAR, said listing MLS “restricts available information about the market and makes it difficult for other agents, buyers and sellers to determine the value of nearby properties and attempt to determine the current market value of a particular property.”

Can a pocket list sell your home?

Privacy is the main reason why Wilcox and other agents say sellers ask about marketplaces, exclusives or bag listings.

For example, Compass Real Estate Company promotes “Compass Private Exclusive Expert”, and agents carefully share “Compass Private Exclusive Authoritarian” with colleagues and buyers. Some sellers have changes in their family or financial status, health issues or possession of valuables (such as art or antique furniture) that they do not want anyone to search online.

Others may express “reasonable concerns” about privacy or legal issues when selling their property, such as restraining orders or bankruptcy proceedings.

Other examples that a private listing may be useful to you include:

You already know your buyer

If a friend or neighbor has made an offer directly, you may not need to list your home, but be sure to have a real estate attorney and tax professional review everything before signing. If you are looking for someone to mediate between you and your loved ones to avoid problems, a real estate agent can still play a key role as a transaction coordinator, which may lower commission rates.

You want to “test water” by price

Wilcox talked to a seller who wanted to see their house pick up the goods without putting it on the MLS and thought they adjusted the price later, no one knew. However, according to SmartML’s guidelines (Wilcox is a member of the local real estate agent), the property will still show a market time for lowering prices and dates to return the listing agreement.

Agent’s Comparative Market Analysis or CMA, which evaluates your home to comparable sales and adjusts to the competition difference, is a better way to reach a listing price without disrupting your time in the market. Wilcox said she and her clients chose not to do a pocket listing, and the property was easy to sell once they entered MLS.

Your home is in the high-priced echelon in your market

Sellers of luxury homes are often attracted by the privacy provided by pocket lists. High prices (or high-profile sellers) may attract unnecessary attention to the property, such as media coverage or buyers who do not seriously make an offer. In this case, it may be attractive to allow listing agents to sell the home to a select pool of buyers, collecting feedback and finding buyers through targeted exposure.

Bag list: Cautionary way

Although they are not illegal, for most sellers, a sales list may be more complex than they deserve. Wilcox recommends that if you are suitable for the seller category that is listed in bags, ask your real estate agent for their experience in this type of sales. How will they reach out to find a buyer?

Plus, while the pocket list provides privacy, it’s not a ticket to avoid sales preparation. Even if you are selling to a dedicated network, you may need to do the home and do the necessary repairs like any other list.

Wilcox recently worked with “extremely private” sellers in the Greater Hartford area of ​​Connecticut, who asked her to keep their three-bedroom, two-and-a-half-bath home away from the MLS. “They just don’t want everyone to watch their homes online; they just want very serious buyers,” she said.

Through her personal and brokerage network, she was able to present property to a small number of interested people who “have no sense of urgency.” Once she listed the property on MLS 30 days later, “it immediately appeared.” “We ended up getting multiple offers,” the contract led to the contract.

“People think, ‘Oh, I don’t want to prepare (my house) so much that we have to take pictures or open houses,” Wilcox said. “But if you want the highest and best price, you have to prepare the house anyway.”

Title image source: (ValClav/poadephotos)