Sometimes it seems as though the home of every Hollywood celebrity or sports star that’s for sale is featured prominently on Access Hollywood or the Wall Street Journal.
The fact is that many choose a legal, ethical and controversial way to keep photos of their homes and their asking prices secret from all but those who might be interested in buying. You’ll never see them on the popular real estate Web sites.
Virtually all real estate sites from the national aggregators like Zillow to your local real estate agent’s site are based on databases of property listings created by the nation’s 900 multiple listing services. Most of these are owned and operated by local Realtor organizations and they were first created about 150 years ago as a way for real estate brokers to share their listings and help match buyers and sellers.
For one reason or another, some listings have never been placed on multiple listing services. Homes for sale by real estate agencies that are not placed on the MLS are called pocket listings. Instead, the listing broker keeps them in his “hip pocket” and markets them outside the MLS. Some real estate brokers encourage them because if they don’t list a property on the MLS, they are not obligated to share the commission with the buyer’s agent.
Many wealthier sellers, including celebrities, protect their privacy by choosing not to put their homes on the MLS. Other sellers like to test the waters for their properties and gauge reaction to the asking price in a controlled environment. Their agents market them as pocket listings, using social media, emails, special websites and old fashioned tactics like open houses to target an exclusive market of wealthy buyers and their agents.
Pocket listings are on the rise and not everyone in the real estate industry is pleased. Recently the California Association of Realtors distributed a Q&A and hosted a Webinar to help its members comply with legal issues associated with pocket listings ranging from the Fair Housing Act to multiple listing service rules that require sellers to be fully informed and agree in writing not to have their properties listing. Even so, some industry leaders don’t believe pocket listings are in the seller’s best interest.
“If the seller is fully informed and provides written consent not to place their home on the MLS, then I’m not concerned,” said Betty Graham, a Beverly Hills broker and president of Coldwell Banker Previews International/NRT, the Realogy franchise’s luxury brand. “But I’m not sure that’s the case in many of the pocket listings I have seen. The fact is that our first responsibility is a fiduciary responsibility to act in the seller’s best interest and with a pocket listing there is a great potential to violate that fiduciary responsibility.”
Ms. Graham has been observing pocket listings in the LA celebrity market for years. Before heading up Previews International, she was the president and chief operating officer of Coldwell Banker Residential Brokerage in the greater Los Angeles area. In her 30 years as an agent and broker in Malibu and elsewhere in the LA market, she represented such luminaries as Rod Steiger, Dustin Hoffman, Charles Bronson, George C. Scott, Cecily Tyson, Cleavon Little, LeVar Burton, Madonna, Sean Penn, plus five transactions with Johnny Carson.