Recently I posted about a ‘hip pocket’ real estate listing and was surprised how many of my friends asked “What is a hip pocket?” While Coachella’s 2019 trend in the hip pocket ‘janties‘ never ever seems appropriate… a hip pocket home listing sometimes makes sense.
A hip pocket listing is a home that is for sale, but the seller chooses not to post it on the multiple listing service. MLS is the database that realtors use to search homes for sale for and also where data is pulled for Zillow, Redfin and other popular real estate search engines.
With a hip pocket listing, the real estate agent keeps the listing in their metaphorical hip pocket – sharing about the property behind the scenes to other agents and potential buyers. Nationally, hip pocket listings are estimated at only 10% of home sales. Here in Dallas, where we’ve had a heated real estate market off and on for a while, several top producer lead sharing networks have developed. We agents share our buyer and seller needs with each other behind the scenes. Quite a bit happens before properties even hit the market, as realtors try to make buyer/seller love connections.
Why would a seller use this approach?
Hands down, a property listing on MLS is the apex predator when it comes to marketing. The best way to sell your house is to get the most eyeballs on your listing. MLS captures eyeballs. That said, here are some of the reasons to consider a hip pocket.
- For privacy: Some people don’t want the general public — or their neighbors — to know they’re selling. They don’t want pictures of the inside of their house on-line for all to see. With a hip pocket listing, all those who come to see the home are pre-qualified, vetted as serious buyers.
- To test the market: If you are being ambitiously high with your price point, this is a safer way to try out your price. If you later decide to lower your price, there is no official on-line record of your original price.
- No ‘Days on Market’ Stats: People start to wonder what’s wrong with a property if it’s been on MLS for a while and hasn’t sold. The listing becomes ‘tainted.’ With a hip pocket, there is no record (therefore no pressure for the seller) regarding how long it’s officially been on the market.
- Like Zillow’s ‘Make Me Move’ feature, but with an advocate working for you: A hip pocket listing might work if you are not in a hurry to sell, but would sell if you could get certain price. A hip pocket listing lets your realtor promote your property to other agents with potential buyers. It could be a very easy transaction without any open houses, questions from neighbors about the sign in your yard, or hassle of many showings with tire kickers.
- Pre-Sale Selling: There is excitement when a buyer feels they have the inside scoop on a listing nobody knows about yet. Even when a seller does want their property to go on MSL eventually, often a realtor will pre-sell it as a hip pocket listing for little while first. There is less room to negotiate a home’s price when it’s not even gone on the market yet, and buyers feel like they have the exclusive.
The negative side of hip pocket listings.
The advantages come with some obvious drawbacks:
- A limited audience: When a property is listed on MLS, it has the potential to be seen by millions of people anywhere in the world. Visibility increases the odds of finding the right buyer quickly.
- No walk-in traffic: Frequently people have a particular area they want to live in and it’s not uncommon for people to drive those neighborhoods looking for “For Sale” signs. Similarly, neighbors may be looking for a home nearby for friends or family. A hip pocket approach could lead to missed opportunities.
- A lower price: It’s not terribly uncommon for a desirable home to receive multiple offers. But, you might miss out on competitive bidders if your home never goes “on the market” in a highly visible way.
These are the reasons most real estate experts agree MLS is the best way to market a property. That said, it’s good to know your options. A good realtor can help you best use all the sales tools out there to your advantage.
For buyers, the possibility of hip pockets out there is why it’s good to have a realtor looking for you. If your realtor knows what you want and the perfect home comes up, they can make the love connection for you too.
Dave Perry Miller has a link on their website just for in-house hip pocket listings – in case you’re curious.