I was driving through my neighborhood in Southern California last weekend when I came across this sign leaning up against a stop sign pole.
I am guessing that these houses sell for around $800,000. Is this how you want your $800,000 home marketed…on a piece of cardboard? More importantly, is this how the home owner wants their home marketed? And do they even know about it? I assure you there is not a real estate agent in America that does not know why this home was kept off the MLS.
It is true that most home owners know little about the process of selling their home. I would bet a majority do not know what a pocket listing is, let alone that it can unknowingly cost them thousands (or hundreds of thousands) of dollars when they sell their home.
Yes, I know. Every industry has some bad people, it is not just the real estate industry. But it is the real estate industry that has, in twenty states, passed minimum service requirements laws that even the Department of Justice declares harm consumers. And why, ostensibly, do these minimum service requirements states have such laws? To protect consumers from themselves.
The justification must be that consumers are so dumb when it comes to selling their home with a real estate agent, that they could be financially harmed if they were given a choice about which of the agent’s services to choose. So, rather than giving consumers a choice, they let the state choose for them. Because they are just too stupid to know any better.
Let’s assume I go along with the notion that consumers are so uninformed in the home sale process that they have to be protected from themselves. Why not make pocket listings illegal? You know, to protect consumers from themselves. I do not know of a single legitimate study that shows consumers benefit from pocket listing, but I can sure as hell point to some that show by how much they are harmed.
The industry claims there are legitimate uses for pocket listing, like when rich, famous people sell their home. Apparently they do not want the common folk to know they are ditching their digs, so they have to keep it off the MLS. Fine. You do not want to make it illegal, then just add a disclosure to the listing agreement. You know, to protect consumers from themselves.
The disclosure should declare that the use of a pocket listing primarily benefits the agent by enabling them to avoid paying a buyer’s agent’s fee, and that it will most likely result in a lower sale price for the home. Then, if a home seller wants to sacrifice their home equity for the sake of the agent’s commission, they can do so with a full understanding.
Unfortunately, this change will never happen, because the only thing the real estate industry wants to protect more than consumers, is their opportunity to double-end the commission. To see how ReaListing puts and end to pocket listings by educating home owners, click here.