Pocket Listings

Pocket Listings

A pocket listing is where a seller signs a listing agreement with a broker but they don’t want the house marketed on the Multiple Listing Service (MLS). Due to the current housing market, this practice is becoming less common.

What’s the benefits and drawbacks of pocket listings?

The main benefit is convenience. Many property owners want to sell their house but do not want the aggravation associated with showing the property.

However, if you aren’t marketing your home on the MLS, you’re not exposing the house in the entire market so it’s harder to determine market value.

For example, if I’m going to sell candy and I’m going to sell it to one person, it’s worth $1. However, if 30 buyers want the same candy, it increases the value of the candy to perhaps $15.

What’s your experience with pocket listings?

As a general rule, we don’t encourage our sellers to keep their property as a pocket listing because it doesn’t fully represent the seller. We’ve had occasions where sellers signs the listing agreement but they aren’t ready to have the house exposed to the market. In the meanwhile, if someone wants to buy the house, they want to sell.

Recently, one of our buyers heard about a house for sale directly through the seller and we submitted what we felt was a fair market value offer based upon the comps. The seller decided at the last moment to expose the property to the entire market and they ended up getting $15,000 or $20,000 more than what we had offered.

Tune in to KXL’s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to real estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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What is a Pocket Listing?

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When we take a listing, we are required to put it in the multiple listing service. A pocket listing is one that’s taken held by the agent but not advertised through the multiple listing service and taken straight to the seller’s direction. It’s mostly advertised through word-of-mouth between brokers. They usually have been most prevalent in the luxury and commercial real estate sectors, but now, with the limited number of homes for sale, they’re becoming more commonplace. This keeps a more private way of selling between brokers. They keep the listing in their “pocket” and then talk to other people who might be interested in buying the house.

Are there any gains from it? For buyers, in today’s competitive market, they might be able to buy a house without  getting into a bidding war. On the other hand, sellers can sell their house without tons of people traipsing through.  Some people prefer to keep things simple and confidential.

There are risks, too. The best way to get the highest dollar possible for the sellers is to expose their property to the highest number of people. Without this exposure, the biggest risk involved is under-pricing the property. For the buyer,  the biggest risk is to pay too much because the number that the seller came up with may be completely arbitrary.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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The Latest Buzz on Portland Housing Market

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Are home prices still rising?

It’s a crazy market right now and home prices are still increasing.  Also, we need to consider the growth of the higher end market as it affects the average. For the true measure of value, buyers and sellers should speak with their Realtors.

We’re down to 2.5 months of inventory. If real estate agents stopped taking listings, everything that’s currently on the market would sell in 2.5 months. This is the lowest inventory since May 2006. For reference, a balanced market is 6 months of inventory. We’re seeing an influx of new listings, but due to the high demand, they’re being absorbed by the market right away. There are buyers who want to purchase a home but are unable to because of the low inventory.

Mortgage rates are increasing; they’re right around 4%. This is partly driving the frenzy; some buyers are starting to realize that if interest rates goes up, the amount of house they can afford goes down. For every 1% the interest rate increases, the affordability decreases by approximately $10,000.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Should you sell your home yourself?

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Should you sell your home yourself and save a real estate broker’s commission? What are the risks?

Typically, it’s a real estate agent’s full-time job to sell properties so the Realtor’s skills are going to be more refined than the average homeowner.  According to a National Association of Realtors survey, homeowners who sell their home themselves receive 16% less than if they had been represented by a Realtor.

Moreover, there are certain federally required documents (e.g. disclosures), timelines and other documentation that’s necessary to complete a sale, which, if not done correctly, can be a liability for the seller.

Tune in to KXL‘s “Experts on the 19′s” every Monday morning at 6:49AM and 8:49AM and listen to Real Estate advice from Portland’s Real Estate Advisor, Rick Sadle.

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Twitter @Rick_Sadle
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Is It Better To Price Your Portland Home High To Test The Waters?

Is It Better To Price Your Portland Home High To Test The Waters?

Well. . . the answer might surprise you.

A lot of sellers believe that starting with a higher price to “test the waters” is the right strategy. Research shows that the most activity that you will get around a new listing is during the initial listing period. That is when the most people will see and pay attention to a new property for sale. If your price is too high, all that you are doing is helping to show what a great deal the property down the street is.

Properties that are priced right to start with sell for more money and in a shorter period of time than those that are “testing the waters”. The numbers speak for themselves.

January – Should I Sell My Portland Home Now Or Wait ‘Til Spring?

Should I Sell My Portland Home Now Or Wait ‘Til Spring?

Home sellers are wondering if they should sell their home now or in the Spring.

 

Well. . . the answer might surprise you. While most home sellers are thinking about selling in the Spring, most home buyers start thinking about buying in January. Now that the holidays are behind them, they are ready to start looking at homes. Since most home buyers start their search online and can take (on average) 60 days to decide on a home, a seller in today’s market would be smart to get their home on the market in January or February to take advantage of all this demand. This year in particular, due to low interest rates and the fact that most buyers believe prices will continue to rise, the Spring “buying season” has started even earlier than usual.

It’s simple supply and demand. Why wait to put your Portland home on the market in the Spring when there will be more competition. I would suggest marketing it now while there is lots of demand and not much supply. It’s the best way to get the most money for your home.

 

 

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