All you need to know about off-market properties – Pocket Listings, Pre-mls listings, Coming Soon Listings | Zenlist

As high-tech as today’s real estate world is, there are some listings that you just won’t find online. At least until now..

Off-market properties – also called pre-MLS, coming soon or pocket listings – are becoming more and more common in today’s industry. You might hear about them from a friend buying a home, a real estate agent, a neighbor or even just see a sign on the street.

And while they might be harder to come by, they’re often the Holy Grail of real estate deals, offering lower competition, a faster purchase process and, in some cases, a more negotiable price.

Let’s start from the beginning with a quick summary of what off-marketing listings are and why they’re heating up in today’s market.

As high-tech as today’s real estate world is, there are some listings that you just won’t find online.

Off-market properties – also called pre-MLS, coming soon or pocket listings – are becoming more and more common in today’s industry. You might hear about them from a friend buying a home, a real estate agent, a neighbor or even just see a sign on the street.

And while they might be harder to come by, they’re often the Holy Grail of real estate deals, offering lower competition, a faster purchase process and, in some cases, a more negotiable price.

Let’s start from the beginning with a quick summary of what off-marketing listings are and why they’re heating up in today’s market.

Glossary & Definition

In the U.S., real estate listings are categorized into two groups:

1) on-market listings, or properties listed on an MLS, or

2) off-market listings.

On-market listings are put on one of the country’s nearly 1,000 multiple listing services by a licensed real estate agent. An MLS allows these agents to market their properties and establish contractual offers, line up appraisals and more.

Off-market listings, on the other hand, aren’t listed on an MLS. For sale by owner (FSBO) properties are always off-market listings, because you need a real estate license to list on any MLS database. We’ll go into other types of non-MLS listings later, but for now, let’s look at the implications of going off MLS, and what it means for buyers and sellers of these properties.

The Implications of Off-MLS Properties

Naturally, off-MLS properties are harder to find. Many online sites like Realtor.com and Redfin.com use MLS data to populate their listings, so when properties aren’t on an MLS, buyers can’t find them on these sites or apps either. Generally, off-MLS properties are discovered through an agent, a street sign or even neighbor or friend.

Off-market properties exist in every market, just in different quantities. Big, urban centers like New York City, Los Angeles, Chicago, Miami and Dallas are all markets with high shares of off-MLS listings. In San Francisco, about a quarter of all sales come from off-market listings, while in Denver, the off-market share is about 15 percent.

As with anything, there are pros and cons to off-market properties – both for sellers and potential buyers.

Browse Our Off-Market Listings

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For Buyers

On the buying side, off-market properties mean less competition – or maybe even no competition at all. By offering a premium price on these listings, buyers can avoid tireless bidding wars, haggling and time-consuming searches and showings – particularly in hot markets.

Buyers may also be able to get an unexpected deal on an off-market listing, maybe because they know the seller, have some connection to them, or the seller is wanting to get the property off the market quickly.

For Sellers

Sellers see a number of benefits from going the off-market route. For one, starting off-market can allow sellers and their agents to solicit feedback on the property without increasing its days on market (see our recent post on DOM to learn why that’s important!)

It also gives the sellers a foundation to evaluate their listing price, staging and other details. What offers came in while it was off-market? How did those measure up with expectations? Should the price be adjusted before going on MLS?

Generally, a seller would opt to keep their home off market if:

  • They’re a celebrity or well-known person who wants to protect their privacy
  • They don’t want others to know they’re selling their home, for personal reasons
  • They’re very reserved or private and want to avoid lots of coming and going in their home

Criticism: The Dual Agency Problem

The biggest problem with off-market properties is that they often fall into a “dual agency” trap, where the selling agent is promoting their non-MLS listing to their own buyer-side clients.

Though at first glance, it might not seem a big deal, there are some pretty big issues at work when an agent represents both sides of the transaction:

  1. They don’t have the best interest of either party at heart. They’re getting commission from both sides of the deal, so they’re not motivated to truly serve either the buyer or the seller. After all, they’ll get paid no matter what!
  2. There are ethical issues are work. Agents working both sides of the transaction would need to inform both parties of their involvement – and the fact that they’ll get commission from each side.
  3. It’s technically complex. There are different disclosures, contracts and documents that must be handled separately on each side of the transaction, and mistakes can be costly – both in money and time.

Most agents will shy away from pushing their seller listings on other buyers, but it does happen. Just make sure you know who is listing any off-market properties you’re being shown, and ask your agent to be forthcoming about any potential conflicts of interest.

Off-market Property Types

Aside from for sale by owner listings, there are a few other property types that are commonly sold off-market. These include:

  • Coming soon or pre-MLS listings – These are listings intended to build buzz around a property that will soon hit the MLS, though the homes are often sold before that point.
  • Pocket listings, whisper listings and tip-pocket listings – These don’t have a defined go-to-market or MLS date and may never hit the MLS at all. They’re often meant to be private, behind-the-scenes sales.

The same types of off-market listings aren’t seen in every state or city, as laws and regulations vary. In Milwaukee, for example, coming soon listings aren’t allowed, while in L.A., those listings are one of the most commonly sold in the city!

The Rise of Pre-MLS Listings

Today, experienced agents typically have about 10 to 15 percent more inventory than they actually have on the MLS. These are properties in this “pre-MLS” phase that they can show exclusively to their own clients and network of brokers and partners.

Agents have become big fan of pre-MLS listings in recent years, especially as new technologies have made sharing properties broker to broker easier and more convenient. Here are just a few of the tech options making pre-MLS listings easier to share with others

  • Top Agent Network, a platform launched in L.A. but now operating nationwide
  • Off-MLS, a Chicago-born tool now serving all 50 states
  • ThePLS, a pocket listing service for agents

Though these tools serve only to expose off-market properties to other brokers, the natural evolution would have tech enabling consumer access to non-MLS properties. That’s exactly what we’re doing here at Zenlist, connecting Chicago brokers and consumers on the same platform to improve access to all local real estate has to offer.

Want a way to find off-market properties for yourself or clients in Chicago? Zenlist can help.