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The pocket listings we have in my area are typically done to hide/reduce the amount the house was actually bought for, and thus, reducing the property taxes on the home.
Obviously that is against the law, cheating taxes by understating the sales price to officials. In my home state people who don't want their actual sales price put in the newspaper (small town gossip) will have their attorney do a straw man transfer for a small dollar amount. But inquiring minds can go to the county tax office and view the deed which shows how much tax was paid on the true selling price and do their own computations. They had to work for this free info haha. Nowadays it may be online but would have to be scanned and uploaded from orig. documents.
I had an step-uncle who was this private, didn't want people to know his bizness. It hurt his real estate sale prices and he sold 2 valuable properties for 50% less than his sibling who sold at the same time (property adjacent), I'd describe his sales as pocket listings and there was likely his effort to control "who" bought since he owned more property next door. Interesting story from arms' length and glad not to be involved. Racism can be an element of pocket listings along with other -isms.
Obviously that is against the law, cheating taxes by understating the sales price to officials. In my home state people who don't want their actual sales price put in the newspaper (small town gossip) will have their attorney do a straw man transfer for a small dollar amount. But inquiring minds can go to the county tax office and view the deed which shows how much tax was paid on the true selling price and do their own computations.
Yes, it's against the law, but it happens a lot, since TX is a very high property tax state since we do not have a state income tax. What usually happens is a house that is valued at say, $1.5 million on the tax rolls but hasn't been sold in a very long time, the true market value could be as high as $3 million.
So the seller wants his $3 million, but the new owners don't want to pay double the tax value, so they have a sales agreement for $1.8-$2 million or so, and pay the additional money in a completely separate, non real estate transaction to the seller. The state/county doesn't investigate because they're getting more tax dollars than previously, after all and there's probably very little way they could prove anything.
Yes, it's against the law, but it happens a lot, since TX is a very high property tax state since we do not have a state income tax. What usually happens is a house that is valued at say, $1.5 million on the tax rolls but hasn't been sold in a very long time, the true market value could be as high as $3 million.
So the seller wants his $3 million, but the new owners don't want to pay double the tax value, so they have a sales agreement for $1.8-$2 million or so, and pay the additional money in a completely separate, non real estate transaction to the seller. The state/county doesn't investigate because they're getting more tax dollars than previously, after all and there's probably very little way they could prove anything.
That is also deflating comps for people selling their homes since this sale recorded officially at a lower price will lower everyone's potential market value. Not just hurting "the man" IOW hurting many owners.
Thanks for the info, I have many relatives in TX and never heard of this, but they don't own pricey RE so they may not know this.
Here's an interesting one in my town. It's never been listed on the MLS as far as I can tell. It has had a for sale - coming soon sign for a while. Zillow lists it as: Coming soon: Oct 22
However, driving by it, you will see a for sale sign that says under contract! What gives?
We are interested in seeing what comes of it and would loved to have gone to an open house as it's one of the most unique houses, architecture-wise, in town. Unfortunately it's essentially a boarding house and is in shambles.
It has been common here for several years.
There is a good rationale for using "Coming Soon" as a listing agent.
I have one now. Sign in the yard. Building marketing material, website, craigslist, etc, but photos can't get done until Thursday. Hoping to be on the market, "Active" for the weekend.
All legit. NO Showings.
Agents using "Coming Soon" to pocket the listing, sell it in their own firm, pimping it to get dual agency and buyer calls, all self-serving, have worked to take that utility away from me.
Our MLS also lets us do a "Delayed Marketing Date," for similar reasons, but absolutely no promotion or advertising or showings allowed.
The scammers will mess that up next, I am sure.
you're not supposed to put a sign in the yard for a Delayed Marketing Date.
Policed well, "Coming Soon" can work very well for all parties. I can't think of any harm to any party from its proper usage.
And that includes the fact that you can actually buy or sell a Coming Soon, "sight unseen".
you're not supposed to put a sign in the yard for a Delayed Marketing Date.
Policed well, "Coming Soon" can work very well for all parties. I can't think of any harm to any party from its proper usage.
And that includes the fact that you can actually buy or sell a Coming Soon, "sight unseen".
You're not supposed to whisper about the Delayed Marketing Date to anyone, although the BIC should probably know.
Definitely no sign until that marketing date.
I just did one with a Delayed Marketing Date, and then a week of Coming Soon, legit, and it worked.
But the grifters and trash agents will go right to work on perverting Delayed Marketing Dates if Coming Soon gets too restricted.
you're not supposed to put a sign in the yard for a Delayed Marketing Date.
Policed well, "Coming Soon" can work very well for all parties. I can't think of any harm to any party from its proper usage.
And that includes the fact that you can actually buy or sell a Coming Soon, "sight unseen".
Agreed.
I'm sure you receive the same emails from the same brokerage I do always touting their "coming soon" listings (think Elmer Fudd going gently down the stream).
I showed one once. It had a sign up since January and I showed it in March. It wasn't in MLS and I only knew how long it has been "coming soon" because it happened to be down the street from the house of some of my closest friends. House was a war-zone inside and it was being sloooooowwly renovated. Too much to handle for my client.
5 months later; a full 7 months after the sign had been in the yard; it hit the MLS after all the work was done and it looked beautiful and low and behold it went under contract very quickly and low and behold a "sold in 2 days" rider gets slapped on.
I assume the seller wanted to see if anyone would purchase it "as is" for a reduced price in lieu of doing the repairs; but was also willing to do the repairs to get top dollar. . It sold for about 80-100k more than we would have gone in for it "as-is".
Personally I find a "coming soon" sign in the yard for 6 months and then a "sold in 2 days" rider afterwards tacky and obnoxious on the side of the agent; but not necessarily harmful to consumers IF that was how the seller expressly said they wanted to go about things.
Had I not received a dozen or so emails from Elmer-Down the Stream about this particular house and several others "coming soon"...I'd be inclined to agree that their seemingly high amount of "coming soon" listings is a ploy to double-end the deal.
The real estate game will surely get changed, non-sense like this and the 5-6% commissions will eventually go away or get greatly reduced. You don't use travel agents anymore, you can deposit/withdraw money without a teller, you can buy a car online without a salesman..............its only a matter of time.
Market is still hot, properties sell without any "active" selling by anyone. It irks me when a soccer mom realtor says "I sold" this or that. No you listed it, someone made and offer and you told the seller to take it. You didn't actively "sell" anything. These are the people that get killed in the recessions when things don't go so smoothly!
I have noticed it in my area (mid-Atlantic region), too.
I don't know if this is related, but I've noticed something going on with open houses. I follow agents on social media. An agent will post on Friday an open house will be held the next day (Saturday) for a new listing. Then I see a post stating the open house is cancelled because the house is under contract.
All of this happens pretty quickly. I didn't realize how quickly this was happening until my friend (who's trying to buy) pointed it out to me.
We just sold a house and it played out similarly, but there was no scamming - the house just sold that quickly. The listing went live on Thursday about 5P. The inventory in our county was low and we had several requests for showings within the next 12 hours. The first realtor who showed the house made another appointment for the next morning and left feedback on the website that she'd be presenting a contract by Noon, which is what happened. Having seen the feedback, we waited for our realtor to contact us and when that hadn't happened, we got in touch with them. They'd planned to hold onto the contract until after the other showings and the Open House, as they felt we may get a better offer. The offer was everything we wanted - over the price we were asking, non-contingent and a quick settlement. We told the realtor we wanted to accept, as we worried the house might not appraise for the price they'd offered anyway. Long story short, the deal wasn't finalized until the next day - the day of the Open House. Our realtors didn't feel there was adequate time to cancel without risking realtors would show up expecting the house to be open, so they held the Open House and let people who came know the house was under Contract.
So it does happen that fast in certain markets - with nothing underhanded taking place. The buyer of our house was someone who had been looking for 4 months and she and her realtor were all over new listings the minute they hit. We know two people in another market that have been trying to buy a house for several months and finding houses under contract almost as fast as they're listed - but there is low inventory and the market is hot.
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