Have you ever noticed a “For Sale” sign and a “Sold” sign go up at exactly the same time? If so, you probably wondered how this was even possible—and if you’re like me, you also may have felt a surge of anxiety that you’d never be able to move quickly enough to snap up a home.

What you probably saw was a pocket listing, which only constitutes 10 percent of total listings. Pocket listings are an unconventional way to sell a home, but they can offer a convenient, appealing route for sellers in certain circumstances.

What is a pocket listing?

A pocket listing is a property for sale that isn’t listed on the MLS, or multiple service listings database. Real estate agents use the MLS to list homes for sellers and find homes for buyers. The agent with the pocket listing keeps it in their “pocket” and only shares it with select buyers.

“Pocket listings can be a bonus for agents,” says Virginia-based Neighborhoods.com agent Cathy Howell, who notes that an agent with a pocket listing needs to put aside any desires to finalize a transaction quickly and instead focus on getting the best price for their clients, whether they’re buyers or sellers.

“When an agent is able to buy or sell a home for a client off-market, they are sure to have long-term loyalty as well as references for future clients. Happy clients who have gotten the home and price they want are the best advertising,” she says. 

Happy clients who have gotten the home and price they want are the best advertising.

Why would a seller choose a pocket listing?

Why would a seller want to avoid the MLS, where they’d get maximum exposure and the potential for higher-than-asking-price offers? Though an uncommon choice, there are several reasons why a seller would prefer a pocket listing.

Sellers who want to remain private, such as a celebrity or wealthy individual, might select a pocket listing to maintain anonymity and keep foot traffic—and oglers without any real interest in purchasing—out of their home.

However, pocket listings aren’t just for the rich and famous. Sellers might choose the pocket listing route because of the possibility to negotiate a lower commission: Since the listing agent doesn’t have to do as much work marketing a property, they might consider taking less money in the final transaction.

Another reason for opting for a pocket listing is that a seller might simply have a specific buyer in mind. Perhaps they know for a fact a neighbor or family member has always wanted to buy their home, for example, and now the time has come for them to sell. By choosing a pocket listing, they can sell directly to a specific buyer without the hassle of putting a property on the MLS.

Similarly, pocket listings help generate serious buyers only, as opposed to people who might be looking for a property more casually.

Are pocket listings good for buyers?

“They can be tricky,” Howell says. “However, I’ve been extremely successful in aiding my clients in finding the perfect home by seeking out pocket listings.” Howell says pocket listings might be good for buyers who know their target community well—and who choose an agent who does a lot of listings in the same community. 

“It’s almost certain they’ll have something that is not yet on the market or listed publicly,” she says. If you already know your ideal neighborhood and what you’re after, partnering with an equally savvy real estate agent might help you gain access to a pocket listing.

“I often get calls from agents who are looking for a specific property, and it’s not uncommon for me to have something coming up that meets all of their requirements,” Howell says.

What’s more, buyers who choose a pocket listing won’t be competing with other buyers. There’s less of a chance for bidding wars—and the accompanying stress.

On the flip side, remember that real estate agents have a responsibility to get the very best price for their sellers. That means if an agent is handling both sides of a pocket listing—representing both the buyer and the seller—buyers will want to proceed carefully.

But remember that pocket listing sellers will likely be less flexible on the price. Since the general public isn’t privy to the sale price or other details about the home, most pocket listing sellers are  firm in their list price. That’s also because there isn’t a larger public interest to put in multiple offers and drive the price higher, which, as mentioned above, can help buyers avoid bidding wars.

Put simply, buyers should expect to pay full asking price for a pocket listing.

Are pocket listings legal?

Yes, pocket listings are perfectly legal. However, for some real estate agents, pocket listings have become somewhat of a “dirty word,” according to the National Association of Realtors. Certain markets with high demand and low inventory increasingly use pocket listings as a workaround, which can have lasting effects on the accuracy of the MLS.

According to NAR, pocket listings “make it difficult for other agents, buyers, and sellers to determine values of nearby properties.” Moreover, the MLS database is compromised “because a true and accurate picture of price, sales time, and sales activity is not recorded.” Fortunately, in most markets, only a small portion of sales are from pocket listings, meaning the MLS is an accurate, reliable tool for buyers and sellers who opt for traditional listing techniques.

How do you find a pocket listing?

There’s no way to find a pocket listing without the help of a seasoned realtor. Remember, while you may be able to browse sites like Neighborhoods.com, you won’t have access to the MLS without certified credentials—and even if you did have access, a pocket listing wouldn’t be included on the MLS, anyway. As Howell mentioned, buyers interested in finding a pocket listing would do well to choose a seasoned real estate agent well-versed in their target area.