Pocket Listings and Expired Listings – Hidden in Plain Sight!

Posted On August 7, 2024

Well, not really in plain sight but pretty much there if you take the time to look for them.

It is not a joke – in fact, it is serious business – getting leads to opportunities in real estate. There are over 165,000 Realtors in Canada at last count and everyone is trying their best to not only survive but succeed! And every chance that you can grab of, counts in the long run.

It is an instant-gratification world and there are several deals that fall to the side just because you don’t have the time to really look into it. Nothing is 100% certain but there are hidden gems that can yield better-than-expected returns.

Two such unheralded opportunities that are overlooked by the general public and sometimes even by industry experts are pocket listings and expired listings. These are off the beaten path to leads but off-market and unsuccessful listings do have immense potential for those willing to explore them.

Just in case you haven’t heard of them before (we told you, they are pretty much hidden!), we are your guides to pocket listings and expired listings. If you are a seasoned real estate investor, you may still be able to pick up some tools to take advantage of these lesser-known options.

Pocket Listings

First, let us talk about pocket listings.

Quaintly named so because it is not readily available to the market at large – “safely in the pocket”, as it were – pocket listings are exclusive property listings.

Simplifying it further, it is a real estate transaction that is handled by a single broker or agent on their own, without it being made available through a multiple listing service (MLS). These off-market listings are shielded by degrees of privacy and promise exclusivity to the parties involved. Sellers who prioritize their privacy or have already identified a potential buyer within their network often find this method easier and more discrete.

Why are Pocket Listings Appealing?

Pocket listings are a particularly preferred option for high-net-worth individuals, celebrities, or those with unique or high-end premium properties. Discretion is the name of the game here.

By keeping the sale transaction contained and private, these sellers avoid casual buyers and focus solely on serious, qualified prospects. Going a step further, pocket listings allow sellers a sort of trail run – a chance to gauge the market’s interest before committing to a public listing.

However, investors and buyers need to remember that while pocket listings offer advantages, they also have a few drawbacks.

The privacy and exclusivity are great, but this means fewer offers to compare or lower bids – as a seller, you may be missing out on a competitive bidding war that can boost your selling price. For buyers, they have less competition, but they have to process the transaction with minimal information and transparency about the property’s true market value.

The Not-really Expired Listings

Expired listings are properties that were listed on the MLS but did not sell within the specified listing period that was agreed upon.

When the seller’s contract with their agent becomes void after the end of the listing agreement date, the property listing is automatically considered an expired listing.

Please note that just because the property did not sell within the agreed-upon period, it does not always follow that there is something wrong with it. There are several reasons why this could happen with a perfectly alright home – you need to figure out whether you can live with it.

Looking for Expired Listings

Expired listings may no longer be live due to pricing issues, marketing problems, or a slow market. These probable issues translate into a golden chance to buy them at more favourable prices, as sellers are ready to negotiate.

However, you need to proactively go after expired listings. Stay ahead of your competition by positioning yourself in a manner that attracts the best information.

Actively use the MLS, network with industry professionals and real estate agents, and do a drive-through of neighbourhoods that attract you – all these will help you keep your eyes and ears open to any new opportunities.

Investing in Pocket and Expired Listings

Like we said, it takes a bit of effort to scout for and grab these hidden opportunities. Are they worth the effort? Yes absolutely.

Investing in these listings can offer several benefits for real estate investors.

Motivated Sellers

Having gone through a disappointment, owners of these properties are often more motivated to sell. This motivation can translate into greater flexibility in negotiations with potentially more favourable terms for the buyer.

Sellers may be willing to accept lower offers to expedite the sale and investors can thus acquire properties at discounted prices.

Less Competition

The exclusivity of the pocket listing transaction works to your benefit – it limits the number of potential buyers and increases your chances of securing the property.

Similarly, the general market tends to ignore expired listings, allowing serious investors to take primer-mover advantage and make successful offers.

Opportunity to Test the Market

Pocket listings are a valuable tool for sellers to gauge the market’s interest in their property, including the pricing.

Investors can leverage this information to negotiate more effectively.

Strategies for Successfully Acquiring Listings

To successfully find pocket listings and expired listings that work for you, a multi-pronged approach is a must. Here are some effective tips:

Networking

Build a strong network with real estate agents, brokers, and industry professionals. In addition to industry insights, they can also guide you to upcoming pocket listings and soon-to-expire listings, giving you a distinct advantage.

Online Resources

There are several online platforms, websites and even specialized software that offer databases of expired listings in Canada.

You can use them to help you scan MLS data, and identify and track changes in property status, providing you with the necessary data.

The Best Approach

Once you’ve identified potential pocket listings or expired listings, we recommend a direct-to-seller approach. This includes personalized letters, emails, or phone calls to connect with the property owners and present your investment offer.

Bear in mind that they may be wary of new callers or even frustrated. Approach them with empathy and offer a fair value to help build trust and negotiate fruitfully.

If the same agent is representing both the buyer and the seller, ensure that you strictly adhere to all relevant regulations to maintain transparency and integrity throughout the transaction.

The Power of Pocket and Expired Listings

As we have attempted to show you, pocket listings and expired listings are a unique opportunity for real estate investors and buyers.

Now that you have a better understanding of the dynamics of these listings, you have the strategic advantage and can step into potentially lucrative investments. However, determining the accurate market value of a property that has limited public exposure can be a tough challenge.

Consult a professional for advice. You can also equip yourself with thorough market research, analyzing comparable sales in the community, and professional appraisals to avoid overpaying for a property.

Remember, success in this niche demands a proactive approach, a strong network of industry experts, and using the right tools and resources.

So, what are you waiting for?

Explore the world of pocket listings and expired listings – this may be your chance to buy a home that could become your next big investment success story.

Some FAQs to Get You Started!

What is a Pocket Listing?

A pocket listing is a real estate transaction that is handled exclusively by a single broker or agent – it is not made available to the broader market through a multiple listing service (MLS). These listings offer privacy and exclusivity for sellers who wish discretion or have already zeroed down on a potential buyer.

What are the Advantages of a Pocket Listing?

The main advantages of a pocket listing include:

• Privacy for both the buyer and seller
• Exclusivity, allowing the seller to focus only on serious, qualified buyers
• Potential to test the market and gauge interest before a public listing
• The listing agent can earn the full commission without having to share it

What are Expired Listings?

Expired listings refer to properties that were previously listed on the MLS but did not sell within the specified listing period. When a seller’s contract with a real estate agent expires, the property is considered an expired listing.

Why are Expired Listings Beneficial for Investors?

Expired listings may have faced challenges such as pricing issues, marketing problems, or a slow market.

For real estate investors, expired listings can offer several benefits:

• Motivated sellers who are more open to negotiation
• Lower competition compared to new listings
• Potential to acquire properties at more favourable terms and prices

How Can I Find Pocket Listings and Expired Listings?

There are several strategies for finding pocket listings and expired listings, and two of the most effective are:

• Networking and building relationships with real estate agents, brokers, and industry professionals
• Employing a direct-to-seller approach by sending personalized outreach to owners of pocket listings and expired listings

What are the Potential Challenges of Investing in Pocket and Expired Listings?

Some of the potential challenges include:

• Addressing seller concerns and building trust
• Ensuring compliance with regulations and ethical considerations
• Accurately pricing and valuing properties with limited public exposure