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Buyers cut out by private listings?

Posted by Scott Van Voorhis June 24, 2013 09:23 AM

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It's not as if buyers didn't already have it tough in Greater Boston's listings-starved market.

Well now here's another way buyers are getting chiseled in what is now officially a sellers' market.

A growing number of listings aren't even being advertised publicly or put on the MLS system for brokers and others to look at.

These so-called "pocket listings" are an emerging black market in real estate, with enterprising - maybe overly so - brokers looking to get the listing before it goes to market and privately line up a buyer ready to pay whatever it takes.

In highly competitive markets, pocket listings are becoming a "significant factor" Kenneth Harney notes in a recent column.

There is no question this is a boon for brokers, who can profit immense by gaining control of listings before they hit the market.

Here's Harney:

If agents can sell their off-market listing to a buyer-client they bring in on their own, they can collect both sides of the commission rather than split it with another agent. If they can sell it through colleagues in their own firm - even at a slight discount to regular commission rates - the full commission remains inside the brokerage.

For the average buyer, just trying to figure things and without the time to become a part-time real estate junkie or expert, this trend is definitely bad news.

Basically, this allows the best potential listings to get sold privately, leaving the vast majority of buyers to fight over the crumbs.

How's that fair? So what's your take?

This blog is not written or edited by or the Boston Globe.
The author is solely responsible for the content.

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About boston real estate now
Scott Van Voorhis is a freelance writer who specializes in real estate and business issues.

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