And why you probably shouldn’t list your home this way
Hip pocket or pocket listings are when an agent has agreed to market your home without publicizing the listing. This usually means the home will not be put into the MLS system and no print or online marketing will be done. The agent will use his or her network to discreetly find a buyer for the property, often times bringing the buyer him or her self.
A hip pocket listing can be a good option if seller’s are testing the waters and don’t want people to know their home is up for sale. It also could be a good idea to generate some “pre-listing” buzz if handled appropriately. Agents like hip pockets because it can give them a sense of control and allows them “shop” the home to their office first (making more money for their firm.
However, a big problem with this type of a listing if you go from hip pocket to contract is that you don’t have the benefit of the “market” behind you. A home needs to be exposed to the open market to have the best chance of selling for top dollar. With a pocket listing, multiple offers are less likely and selling your home for the highest possible price is more of a challenge. The more you limit the pool of buyers, the more you hinder your chances for the best possible sales price.
Additionally, if the listing agent brings the buyers, you may find yourself in a “dual agency” situation. Dual agency means the agent represents both the buyer and the seller at the same time. This makes absolutely no sense – except to the agent who may be making double the commission! No matter what anyone says, a real estate agent cannot effectively represent two parties at the same time in the same transaction.
Before you agree to a pocket listing, make sure you are willing to possibly sacrifice some money on the sale of the home. If not, your best bet is to market the home to the fullest on the open market.