Fred Griffin: The Pocket Listing! Ethical, or Not Ethical? What is the Harm?

The Pocket Listing! Ethical, or Not Ethical? What is the Harm?

     A Typical Pocket Listing scenario:  The Agent takes a Listing on Friday.  He puts the sign in the yard.  But, the Agent waits until Monday to put the Listing in the MLS!  The reason - if the Listing Agent can sell the house himself over the weekend, he can keep "both sides" of the Commission! 

 

     The term "Pocket Listing" in this Blog refers to an Agent keeping the Listing Agreement in his pocket for a few days, and not giving it to his Broker or assistant for entry into the Multiple Listing Service.  The Seller is not aware of the pocketing; the Seller believes that the property is going into the MLS.

     Definitions of the term "Pocket Listing" vary; there can be Pocket Listings where the Seller is fully informed and in agreement with the Listing Agent withholding the property from the MLS.

 

 

 Tallahassee Florida Homes For Sale

 

     Many houses sell within the first few days after the house is put up for sale.   This is especially true in a sellers' market.  The temptation for the agent to Pocket the Listing may be strong!

 

 Florida House For Sale

 

What Harm can there be in Pocketing a Listing?

   

     What about Ethics?  What about Fiduciary?  What about the best interests of the Seller?

 

     Other Real Estate Agents may have potential buyers for that house.    What if those other potential Buyers would have offered more money for the house?  What if those other Buyers could have created a multiple offer situation for the Seller?

 

     How about the Grief and Inconvenience a Pocket Listing causes for other Real Estate Agents who get calls on that For Sale Sign?

 

     Any Agent who has been in the Business for a while has probably encountered a Pocket Listing.  They have experienced the frustration of a Buyer seeing a sign and wanting to get in the house, but the Listing Agent says, "Sorry - it is not yet in the MLS and there is No Lockbox.  I will have it in the MLS in a day or two."

 

     Are any written terms in the Listing Contract broken by an agent who pockets a Listing? 

 

     Probably not, as long as it is entered into the MLS by the agreed upon time, for example, 2 Business Days.  But Real Estate Agents should hold themselves to a higher moral and ethical standard than simply complying with terms and dates on a Contract!

 

 Fred Griffin Real Estate Tallahassee, Florida

   

     In their quest for the Entire Commission, a Listing Agent who Pockets the Listing may be harming the Seller!

__________________________

 

Frederick Griffin, Licensed Florida Real Estate Broker    850-545-1901

 

Tallahassee Florida Metropolitan Area

and the Coastal communities of

Shell Point Beach, Live Oak Island, Wakulla Beach, Saint Marks, Panacea

 

Exclusive Representation for Buyers and Sellers 

Call Fred  850-545-1901

 

 Realtor logo       HUD Logo Fair Housing

 

 

Frederick Griffin, Licensed Florida Real Estate Broker    850-545-1901

 

Disclaimer:  Nothing in the above blog article is to be construed as legal advice, tax advice, or financial advice.  For legal advice see an attorney.   For tax advice or financial advice see a tax attorney, certified public accountant, or other qualified professional.

 

Comment balloon 11 commentsFred Griffin • April 05 2013 05:01PM

Comments

It happens all the time. It would be nice if we could stop it. I just do not have time to worry about it.

Posted by Tom Bailey (Margaret Rudd & Associates Inc.) over 4 years ago

Fred, I had not heard the term "pocket listing" until I came to Naples.  Funny term, I suppose pocket it or keep it in your pocket?

Posted by Christine OShea (RE/MAX Realty Select) over 4 years ago

Tom, good Brokers won't allow it!

 

Christine - the term does refer to "keeping the signed Listing Agreement (piece of paper) in your pocket", and not putting it into the MLS for a couple of days.

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 4 years ago

Fred, we have a company here in our town that encourages it.  Every new listing that one of their agents gets is held off of MLS until they can do a "caravan" of their agents to see it.  Needless to say, by the time the listing is posted there are already offers on it and the brokerage gets both sides of the deal.  Just as unethical as far as I am concerned but as Tom mentions, who has the time to monitor or report it or even prove it.

Posted by Marnie Matarese, Showing you the best of Sarasota! (DWELL REAL ESTATE) over 4 years ago

Hi, Marnie  -   The Pocket Listing happened to me a few weeks ago.  My Buyer called me about a For Sale Sign - when I called the Agent, she said, "we are making some repairs".  It went under Contract a few days later, showing up in the MLS as "Contingent". 

Posted by Fred Griffin, Licensed Florida Real Estate Broker (Fred Griffin Real Estate) over 4 years ago

Fred:

 

Very nice post and great things to think about. Hope you have a wonderful weekend. 

Posted by Alan Kirkpatrick, Alan in Austin (Austin Texas Homes) over 4 years ago

Fred  My blood pressure goes up thinking of all the unethical practices around here.  The #1 problem is agents leaving a sign up long after a property is sold.  Many vacant lots are bought and sold by out of state sellers and buyers.  even 2nd homes are a problem.  Great post...suggested

Posted by John G. Johnston, An Exclusive Buyer's Agent ~ Westcliffe, CO (John G. Johnston & Associates, LLC) over 4 years ago

In 1970 when I was a Realtor and then got access to MLS. The concept of pocket listings was very common. I put all the Realtors on notice, that I will file suit against the entire membership, if the pocket listing stuff continues. For the most part the practice stopped. I became President of the board two years later.

Posted by Joe Petrowsky, Your Mortgage Consultant for Life (Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709) over 4 years ago

Fred, we dislike pocket listings and they are, technically, unethical.  We have one Real Estate Company that uses pocket listings to try to get an inside deal.  Not only does the Company get both sides, but, the agents get a bonus commission on top of their normal commission for the inside deal.

Posted by Pat & Steve Pribisko (Keller Williams Greater Cleveland West) over 4 years ago

Pocket listings are not illegal if the listing agent fully discloses the pros and cons to the home seller and follows rules that are created to protect consumers.  However, if pocket listings are not handled correctly, there can be some not pretty consiquences....In general, I don't believe the pocket listings are beneficial for the seller.

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) over 4 years ago

Here in CA, there is a huge debate about pocket listings, there is webinar C.A.R. offers: http://www.car.org/newsstand/hottopicswebinarseries/

Posted by Inna Ivchenko, Realtor® • Green • GRI • HAFA • PSC Los Angeles CA (Barcode Properties) over 4 years ago

Participate