“Pocket listing” is for buyers and sellers that do not want to list or find their homes on a multiple listing service (MLS). Listing your home on the broker’s “network” or hearing about a home for sale by “word of mouth” instead of MLS may seem like a good way to go. But InManNews explains that there are some things that you should be wary of if you’re choosing to go with pocket listing.

For sellers

  1. The home might sell for less than market value. MLS ensures that your home is targeted to the maximum number of potential buyers.
  2. You may think you’re saving on agent commissions, but there could still be clauses regarding fees.
  3. MLS is the best way to market your home. Social media may help in getting the word out there, but the only people that are searching MLS are buyers.
  4. Competition between buyers is good. Repairs and other problems may not seem like a deal breaker when negotiating between multiple buyers. There won’t be much competition with pocket listing, so you might be responsible for these issues in order to get a better price.

For buyers

  1. Who represents you? You’ll need an agent behind you to make sure commission is split and covered correctly.
  2. How do you know if the price is accurate? You are in charge of doing research to make sure you’re getting a good deal.
  3. Stipulations, parameters, time frame, and escape clauses are also up in the air. Who is writing your offer?
  4. When you initiate the contact, the seller knows they have something that you want. This puts you in a weaker position disabling your ability to negotiate.

 A version of this post originally appeared on InManNews, Hank Miller real estate expert.