By MICHAEL POLLICK of the Sarasota Herald Tribune.
michael.pollick@heraldtribune.comSome real estate agents market properties through "pocket listings," which can cut costs, but also a home's selling price.
Sure, the 2005 real estate market is so hot that you can sell your home without real estate agents parading their customers through your digs.
The question is, when a seller skips the Multiple Listing Service, whose interest is served? The seller's, the agent's, or both?
A "pocket listing," or "exclusive," is a property that is being marketed through a real estate professional but is not available to the broader world of real estate agents and customers who scour the MLS looking for buys.
The MLS database is the Bible for most local real estate boards and their members because it is where agents representing both buyers and sellers share listing information and the ensuing commission.
Often a pocket deal is simply an oral agreement between an agent and a potential seller interested in selling his own home on his own terms, generally referred to as a "For Sale By Owner," or "FSBO."
Real estate agent boards have little to say about pocket deals, in general, and even less about unwritten deals."
The reason the board doesn't like it is they are basically FSBOs that an agent happens to know about," says John Allaman, a high-end downtown property specialist with Michael Saunders & Co."
For a normal seller, it is much better to be in MLS," Allaman maintains. "To not be in the MLS is to do a disservice to the seller by not having the exposure.
"Pocket listings "have been around forever," says Nick Figlow, who manages more than 70 agents as president of Re/Max Gulfstream.
But the way Figlow explains it, it's more like a real estate agent with a house in his pocket, not one that is really "listed."
"Say I sold you a house five years ago, and you say, 'I'd really like to live in old Forest Lakes. If you find something there, let me know. I don't want to put my house on the market unless there's something I want to buy, and unless you can get me $500,000.'"
"Those are both pocket listings," Figlow says. "An agent I know, he's got three right now that are going on.
"Whether written or oral, pocket deals are "a big deal," says Jean-Jacques Barilleau, an agent at Sarasota's Prudential Palms Realty.
"For the Realtor, the key is to know who is going to sell without anybody else knowing about it, and then you negotiate your commission, and then you bring your buyer."
"I have professional home buyers who are looking for properties not listed on the MLS," Barilleau says. "I would call that a pocket listing."
Two factors in today's market are making agents more eager than ever to line up pocket deals.
First, there are very few homes for sale compared with the number of buyers, so any agreement to sell is better than none.
Second, the agent with a house in his pocket has much better odds for making two commissions on the sale instead of one, as is more likely to happen if he surrenders a listing to MLS.
Easier than ever
In Southwest Florida, where the median price of a home has gone up so much that we make the national lists of hottest markets, it's easier than ever for the agent to accomplish a sale on his own.
Bill G. Hon, an agent with Coldwell Banker Previews office on St. Armands Key, is a booster of what he calls grassroots marketing.Hon generally asks sellers for permission to see if he can sell a property on his own at a reduced commission rate before putting the property into the MLS."
With the seller's permission, I like to do grassroots marketing to what we call friends and family, neighbors, existing condo owners in the complex," Hon says. "I save him money on the commission. It is all pre-negotiated."
As a well-established Realtor, Hon is in a good position to wheel-and-deal privately. But even in his case, there are examples that show the power of the MLS.
Hon recently got a seller to agree to two weeks of grassroots marketing before going on the MLS, on a condominium at Beachway Apartments. It is across the street from Siesta Key's public beach. The three-story walk-up, built in 1970, has seen an incredible 40 percent per year appreciation during the last four years, Hon says.
The seller asked $549,900 for what Hon described as a ground-floor, two-bedroom, two-bath with "glimpse views of Gulf from lanai."
"We tried to sell it ourselves," Hon says. "It didn't work. We got three offers the first day it hit the MLS.
"Even though all three offers were below the seller's asking price, the buyers had identified their interest, allowing Hon to play them off against each other.
"One dropped out that afternoon; the other two stayed in. They both came up to full price. The one that wanted it the most came up to a little over full price and, in addition, removed the financing contingency, which makes it an all-cash purchase."
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