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.