Pocket Listings Yes or No?

David Goldsmith

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REBNY fairly recently enacted a policy allowing them (although the wording seemed to me to be unfair since it was nebulous enough that it seemed that all pigs aren't created equal). Then the National Association of Realtors banned them under it's new Clear Cooperation policy:
https://rismedia.com/2020/03/21/mls-policy/

And end runs around it:

Now we have a lawsuit trying to overturn that:

My personal feeling is that you have a group that wants to operate outside of any form of listing sharing system they should be allowed to. But then they should totally operate outside of it and not be allowed to use it when it's convenient for them. And I find their "privacy" claims to be bullshit.
 

MCR

Active member
So interesting. I just don’t understand how the industry expects to police or enforce any ban on pocket listings. If a buying and selling broker strike a deal with no listing, how does anybody with the power to “discipline” them even know about the transaction?
 

David Goldsmith

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One way is that some brokers are actively advertising them. But that really puts the lie to any claims of privacy issues. I think that's also the consumer issue: if the Department of State wants there to be 2 brokers on each transaction with one representing each side then what do you do when you represent a buyer who is interested in a property but the seller's be broker refuses to work with you?
 

MCR

Active member
Why on earth would one broker ever refuse to work with another broker if there is a deal to be done? I thought the whole point of pocket listings was to spread the word through the broker community in the hope that someone will know someone who is interested. When I asked an agent about them once, she told me she doesn’t take pocket listings because she does not think they yield the highest price for the seller and she can’t stand seeing a seller leave money in the table.
 

David Goldsmith

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One reason is the hope to get a direct buyer and pocket both sides of a commission (or as a lure for new buyers by showing you have access to listings others don't), or at least to give one's own firm the opportunity to do so. A second is a bit of elitism looking to freeze out "lesser" firms (note the lawsuit is a group of self appointed "elite" agents).

What is a pocket listing anyway? It is by definition one you aren't sharing with other agents hence keeping it in your pocket.
 

MCR

Active member
Interesting. It never occurred to me that goal of pocket listing was to hide it from other brokers. I thought it was to hide length of time on the market from the consumer, or even the fact that the property was on the market at all so the seller friends or business associates wouldn’t all start gossiping about the reason for the sale. We bought a pocket listing via a 24-hour private auction in 2006. The seller was a public figure who wanted to sell the property without attracting any attention. We resisted our personal agent’s pleas to look at the property, but once we did, we understood why she dragged us out of work to see it. She had showed us at least 20 houses that we had rejected over the preceding year. She knew this house was what we were looking for.
 

David Goldsmith

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I just saw a video from Compass pushing "Private Exclusives" that will only be shared with Compass agents. So it's not as if there is this demand which they are satisfying. They are actively pushing it at potential customers and then convincing them to ask for it.
 
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MCR

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Solid refutation of my theory that it is the seller who has to push their agent to pocket list rather than publicize on MLS. “Private Exclusives” video makes clear they are trying to generate demand in this area. Interesting.
 

David Goldsmith

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Here is a recent example of an "off market" sale:
May 28, 2020CLOSED$28,000,000ofs property llcView ACRIS Filing
Mar 17, 2015CLOSED$47,367,491

Vs one market listing one floor below:
 

David Goldsmith

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I could see why they wouldn't want the publicity and would take less money for that privelege. Did I mention less money?
Ariana Grande’s new Bird Streets pad was in Ponzi schemer’s portfolio
The pop star’s 10K sf home in the Hills had been owned by now defunct developer and investor Woodbridge Group of Properties

Ariana Grande’s new Bird Streets home had once been in the portfolio of convicted spec home investor Robert Shapiro.
The pop star paid $13.7 million for the home in the Hills in an off-market deal, far less than the $25.5 million it listed for two years ago. The Los Angeles Times first reported the sale. The most recent offering was around $17.5 million for the four-bedroom, five-bathroom property. Compass most recently had the listing for the home on Thrasher Avenue.
The 10,000-square-foot, three-story home has balconies, an infinity pool, a “wellness center,” a 300-bottle wine cellar, and an interesting past.
The Woods + Dangaran-designed home is among the 138 properties tied to Sherman Oaks-based investment firm Woodbridge Group of Properties, according to the Times.
Shapiro, who was head of the now defunct company, is serving 25 years in federal prison for what authorities called a $1.3 billion Ponzi scheme to defraud investors.
In the years before news broke of federal investigations of Woodbridge in late 2018, Shapiro’s firm bought numerous high-end residential properties around L.A., and built spec homes and mansions on many of them.
After Shapiro’s arrest, a court-appointed administrator of the properties — Frederick Chin of Viewpoint Collection — was put in charge of recouping investor losses. Since then Woodbridge’s L.A. properties have been steadily sold off.
Kylie Jenner picked up a former Woodbridge property in Hidden Hills last month for $15 million. Another one, the 20,000-square-foot Carla House in Beverly Hills, sold in January for $35 million.
 

David Goldsmith

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StreetEasy to agents: Post listings within 24 hours or lose privileges
Residential agents see new policy as portal’s latest attempt to control listings

StreetEasy is once again tightening its grip on New York City listings, informing agents they must post sales listings within 24 hours — or risk losing professional access to the site.
In an email to agents on Monday, StreetEasy said it would contact those who are not advertising listings, or who are limiting or delaying listings on StreetEasy.
“It is our intent to gain confirmation from agents that all sales listings will be advertised on StreetEasy within 24 hours of becoming available,” said the letter, a copy of which was reviewed by The Real Deal. “If agents do not respond, we may revoke their access to Agent Tools and potentially other StreetEasy programs until the issue is resolved.”

Sent by Stephanie Schonholz, StreetEasy’s director of industry relations, the letter acknowledged that “agents have a choice in where they post their listings and by no means are obligated to post with us.”
But when they do, they must adhere to a certain standard. “Ensuring customers have a full, timely picture of what’s on the market on our platform is a crucial piece of that puzzle.”

The letter elicited immediate criticism from the city’s residential brokers, who viewed it as StreetEasy’s latest attempt to wrest control over listings.

Since the start of the year, StreetEasy has required agents to manually input listings instead of accepting direct data feeds from brokerage firms. Some have called the policy a form of blackmail that will make it easier for StreetEasy to tack on additional fees for agents. Currently, agents are charged $6 per day to post each of their rental listings.

In a memo to agents, Brown Harris Stevens CEO Bess Freedman called StreetEasy’s “strong-arm tactics reprehensible.”
“StreetEasy claims that they are implementing these new rules under the guise of data integrity,” she wrote. “But there is no integrity in demanding that you advertise your listings with them — the properties you work hard to secure — just to satisfy their sudden timeline requirements.”

A spokesperson for Streeteasy disputed that reading, characterizing the 24-hour rule as part of the portal’s ongoing attempt to ensure high-quality listings information.
“New Yorkers trust StreetEasy to help them find their next home, and they deserve access to the most accurate and up-to-date listings available,” the spokesperson said. “It’s why we have policies in place to hold ourselves – and all of our partners – to the highest data standards.”

The move comes amid a resurgent effort to unseat the Zillow-owned portal as New York City’s de facto multiple listing service.
Last week, the Real Estate Board of New York, which has been cracking down on bad listings data, said it would start fining agents up to $20,000 for inaccurate or unlawful listings.
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REBNY’s universal co-brokerage agreement, which governs how agents share listings, requires agents to share listing data immediately with other members as soon as the listing goes live on any site. Agents also are not allowed to promote off-market listings, known as pocket listings. (If a seller specifically asks for a property to be sold off-market, the agent must file a disclosure with REBNY within 48 hours.)

The National Association of Realtors has also banned pocket listings, which StreetEasy’s new 24-hour rule would seem to address. But the move also comes amid a resurgent effort to unseat the Zillow-owned portal as New York City’s de facto multiple listing service.

In June, Realtor groups in Westchester and Long Island launched a consumer-facing MLS. OneKeyMLS has 40,000 listings obtained directly from brokerage firms — now a key distinction from StreetEasy.
Some of the city’s residential firms have also taken to advertising “coming soon” listings on social media or their own websites, before posting them to StreetEasy.

While most firms begrudgingly migrated toward StreetEasy’s manual entry, Douglas Elliman got into a dispute this spring with the portal over the policy. At that time, StreetEasy threatened to yank Douglas Elliman’s rental listings. The two sides ultimately buried the hatchet, but only after Elliman’s leaders agreed to manual entry for agents.
 

David Goldsmith

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How do you deal with Fair Housing issues on pocket listings? After promising sellers you will bring only "select clients" how do you avoid discrimination issues?
 

John Walkup

Talking Manhattan on UrbanDigs.com
I get the appeal of pocket listings, but I find it hard to beleive that any seller gets their highest price when the buyer pool is limited. Compass is on to something though, in that more and more people object to having their info, whether its pics of their home or price, blithely tossed into the forever pit of the internet. I'm sure we'll see some interesting products down the line to address this. Dark pools for real estate, etc.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
good ole pocket listings...agree on the innovation in the industry for this space, but I feel like its been tried before without much success. Compass seems to figure out the right ingredients for the sauce, so to speak. so I wouldnt be surprised to see them lead the way.
 

MCR

Active member
I get the appeal of pocket listings, but I find it hard to beleive that any seller gets their highest price when the buyer pool is limited. Compass is on to something though, in that more and more people object to having their info, whether its pics of their home or price, blithely tossed into the forever pit of the internet. I'm sure we'll see some interesting products down the line to address this. Dark pools for real estate, etc.
I do think this is the appeal of pocket listings, from those I know who have availed themselves of them: "more and more people object to having their info, whether its pics of their home or price, blithely tossed into the forever pit of the internet." Sellers know they are getting less-than-market-value while giving their preferred agent a chance to return-a-favor or curry favor. If both agent and seller are in on the loss-of-efficiency, only the guy who doesn't know the right guy is harmed. Not cool, but I believe it happens more than I would have suspected before being privy to some of the listings.
 

David Goldsmith

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The problem I have with that is I don't believe sellers are being told by brokers they will get less money. In fact I know at least a few cases where it has been the opposite. Since we are in a time of broker disclosure letters for everything I would be in favor of requiring all brokers taking pocket listings getting a signed document stating the seller acknowledges they will get a lower than market sales price using this technique. I suspect we would see the number of these listings immediately be reduced by a substantial number.

In terms of price it's a matter of public record and if you're any kind of celebrity gets published anyway (see last week's sale by SJP on Charles St). Most people who get convinced by their broker to go this route aren't any kind of celebrity, though, and most of the "leaking to the public" about listings is done by brokers even for pocket listings. I'm seeing all of these mass emails sent from brokers touting properties as "off market" including addresses and pictures, agents on LinkedIn as "off market specialist," agents sending out emails searching for "off market" properties (which would seem to indicate at least progress think there's a very large amount of them). I'm not arguing that there can't be the very occasional celebrity listing which might merit such an approach, I'm arguing that 1) there isn't a whole submarket of them, 2) I don't believe most sellers are being legitimately informed of the downside, 3) it creates inefficiency in the market, and 4) it goes against what NY State Dept of State had been pushing for over 2 decades.
 
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David Goldsmith

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Also, I'm seeing a bunch of listings in various "pre-marketing" schemes by various companies where the address, pics, etc show up on the internet but the listing just isn't shared with other brokers yet. How does that accomplish the stated goals?
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
The problem I have with that is I don't believe sellers are being told by brokers they will get less money. In fact I know at least a few cases where it has been the opposite. Since we are in a time of broker disclosure letters for everything I would be in favor of requiring all brokers taking pocket listings getting a signed document stating the seller acknowledges they will get a lower than market sales price using this technique. I suspect we would see the number of these listings immediately be reduced by a substantial number.

In terms of price it's a matter of public record and if you're any kind of celebrity gets published anyway (see last week's sale by SJP on Charles St). Most people who get convinced by their broker to go this route aren't any kind of celebrity, though, and most of the "leaking to the public" about listings is done by brokers even for pocket listings. I'm seeing all of these mass emails sent from brokers touting properties as "off market" including addresses and pictures, agents on LinkedIn as "off market specialist," agents sending out emails searching for "off market" properties (which would seem to indicate at least progress think there's a very large amount of them). I'm not arguing that there can't be the very occasional celebrity listing which might merit such an approach, I'm arguing that 1) there isn't a whole submarket of them, 2) I don't believe most sellers are being legitimately informed of the downside, 3) it creates inefficiency in the market, and 4) it goes against what NY State Dept of State had been pushing for over 2 decades.
Honest question - arent sellers aware that if they pocket listing and dont publicly promote, that buyer pool will be lower and chances are high that time on market will be longer and maximum profit potential will be limited? Seems pretty logical but my guess is these types don't care much about leaving a few bps on the table in return for privacy
 
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Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I do think this is the appeal of pocket listings, from those I know who have availed themselves of them: "more and more people object to having their info, whether its pics of their home or price, blithely tossed into the forever pit of the internet." Sellers know they are getting less-than-market-value while giving their preferred agent a chance to return-a-favor or curry favor. If both agent and seller are in on the loss-of-efficiency, only the guy who doesn't know the right guy is harmed. Not cool, but I believe it happens more than I would have suspected before being privy to some of the listings.
"Sellers know they are getting less-than-market-value while giving their preferred agent a chance to return-a-favor or curry favor. " -- totally agree
 
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David Goldsmith

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Honest question - arent sellers aware that if they pocket listing and dont publicly promote, that buyer pool will be lower and chances are high that time on market will be longer and maximum profit potential will be limited? Seems pretty logical but my guess is these types don't care much about leaving a few bps on the table in return for privacy
You could ask various brokers you know if they specifically make that part of their pitch. For the sellers I have spoken to who have been pitched the concept, not a single one has said the agent pitching mentioned that. I don't think it's valid for agents to just assume a seller somehow knows it if they pitch all the alleged benefits and are silent on that drawback.
 
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