Homebuying has been steadily improving since the recession, and with the improvement have come new ways to buy and sell homes. NC State University economist Mike Walden explains one of these new methods, called pocket sales.
“This is really a new way of buying and selling a home. And what it simply means is that the seller does not list the property in a standard way. I mean, what you usually do is you contracted with a real estate agent; your property gets listed in something called the MLS, Multiple Listing Service; and the word gets around; you maybe even put a sign out in your yard. That’s the way you traditionally you sell a house.
“This way, you don’t do any of that. What you do is you talk to friends. You talk to acquaintances. You let them know, ‘I think I’m selling a house. Do you want to get in before I list it? Come on and buy it.’ And there are obviously advantages and disadvantages here. The big advantage is you don’t have to go through the process of listing your house. You don’t have to have real estate agents come traipsing through your home (and) you have to leave, etc.
“So people who don’t want to deal with that like pocket sales. One of the big disadvantages is that you are limiting the publicizing of your house or your condo, therefore you are limiting how many people know that it’s for sale. There’s some research that suggests that that means you are going to get a lower price.
“But anyway, people have to weigh these pluses and minuses, and pocket sales probably are here to stay.”