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New Rule Puts an End to Pocket Listings in Chicago

New Rule Puts an End to Pocket Listings in Chicago

house for sale
A house model with for sale words under the frame

With the implementation of the Private Listing Network, the National Association of Realtors hopes to effectively end the practice of pocket listings. When properties go on the market in the Chicagoland area, their listings get added to the multiple listing service, or MLS. From there, agents, brokers, and buyers may view the pertinent data in order to find suitable properties. Before the NAR’s new rule, however, some properties were withheld from public view.

What is a Pocket Listing?

The term pocket listing applies to properties technically up for sale, but not listed on the MLS database. Instead of marketing these homes to any agents and potential buyers, the hired real estate agents keep these listings in their metaphorical pockets. The agents then only share a property’s availability and listing details with certain other agents they know and trust to turn them on to the right clientele.

Why Do Agents Withhold Listings from the MLS?

Numerous factors contribute to homeowners or agents preferring to sell as a pocket listing. Introducing a property as a pocket listing allows sellers to test the market, gauging the interest in their properties and learning what potential buyers might offer for their homes. Sampling the market before formally listing the property on the MLS allows homeowners and agents to ensure it does not sit available for too long, which may cause buyers to be wary or sellers to have to drop their asking prices.

Particularly in the case of high-profile sellers, such as celebrities, selling as a pocket listing may allow them to maintain their privacy. Agents may present pocket listings while avoiding showing pictures of these homes or having people with no intention of buying check out the property to satisfy their own curiosity.

What is the Private Listing Network?

The private listing network, or PLN, allows agents and sellers to preview properties that will soon come available. Doing away with the secret networks of agents, listings, and prospective buyers, the PLN serves as an alternative to pocket listings and an aid in the implementation of the NAR’s newly adopted rule governing the treatment of off-MLS listings. Under the rule, MLS participants must share their listings within one business day of advertising them publicly. Through the PLN, sellers may begin to drum up interest among all potential buyers, not just those in a selective network, in their properties before they are ready to formally list.

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