Off-Market Leads vs. Pocket Listings: Why the Distinction Matters

Disclaimer: PropStream is committed to providing real estate professionals with powerful tools to help generate leads and streamline marketing efforts. However, we do not offer guidance or advice on how agents should share their listings. Real estate agents' strategies and marketing decisions are entirely their own. While PropStream provides resources that may assist in automating these strategies, it is the responsibility of each agent to stay informed on industry best practices and ensure compliance with applicable laws and regulations. Use of PropStream’s tools does not constitute professional or legal advice.

If you’re an agent looking to grow your business, you’ve probably read plenty of articles and watched scores of how-to videos about finding “off-market listings” or “off-market leads.” These terms can sometimes get confused with another real estate term: pocket listings, which the National Association of REALTORS® (NAR) prohibits.

However, pocket listings, off-market listings, and off-market leads are different situations and reflect separate stages in the listing/lead generation process.

In this article, we’ll discuss the critical differences between “off-market leads,” “off-market listings,” and “pocket listings.” We’ll also explore how off-market leads can be a highly valuable—and ethical—way to generate potential clients for listing agents.

What Are Pocket Listings?

Pocket listings are for-sale listings that brokers do not share publicly on the MLS. Brokers may market these listings privately to other buyers or a small group of agents.

For several reasons, a broker or homeowner might sell a property as a pocket listing. For instance, they might want to:

• Ensure privacy for the seller
• Sell the property more quickly to a qualified buyer in the brokerage’s or seller’s network.
• Test the sale price before publicly listing the property
• Allow the listing agent to keep the entire commission, or keep the commission within the brokerage by selling to select agents

Are Pocket Listings Illegal?

No, pocket listings are not technically illegal in any state, but are often considered unethical.

This is because marketing a listing privately to a chosen few could potentially interfere with buyer competition or violate Fair Housing Laws. It can also alter market data, making it harder to run accurate comps or assess local supply and demand. Lastly, it usually doesn’t serve the seller’s best interests, as they might receive fewer offers or lower bids.

For these reasons, NAR has banned the practice, prohibiting any REALTOR® from selling pocket listings. Under the Clear Cooperation Policy (CCP), NAR Association MLSs require any participating brokerages to display their listings on the MLS within one business day of marketing them to the public.

What does “marketing to the public” mean? According to NAR, it can include:

• Putting up or disseminating for-sale signage
• Promoting the listing on public-facing websites or brokerage websites
• Email marketing
• Sharing on private listing networks
• Displaying the listing on publicly available applications

Additionally, listing portals are backing up NAR by banning listings that are considered pocket listings from their websites.

What Are Off-Market Listings?

Off-market listings are properties for sale but not publicly listed on the MLS. While this term sounds very similar to pocket listings, they differ slightly.

Pocket listings are intentionally marketed privately and kept off the MLS (e.g., the agent keeps it “in their pocket”). In contrast, off-market listings are a broader term that includes any property not currently listed—whether due to listing expiration, seller choice, or other factors. In theory, all pocket listings are off-market, but not all off-market listings are pocket listings.

What Are Off-Market Leads?

Where off-market listings refer to the property’s status after it has become a listing, off-market leads are not listings yet, but they could be. They are properties that haven’t been put up for sale yet, but whose owners may be highly motivated to sell.

Here are a few examples of off-market leads:

• Rental properties that have been vacant for months and are causing landlords to lose money
• Properties that are in probate because their owners recently passed away
• Expired listings that failed due to incorrect pricing strategies, poor marketing, or bad timing
• Homeowners facing pre-foreclosure
• Homeowners who are going through a divorce and need to sell their property

Related: 5 Questions to Help You Find Motivated Sellers

Pocket Listing vs. Off-Market Listing vs. Off-Market Leads: What’s the Difference?

Here’s a simple chart that clearly describes the differences between these three terms:

*Click to zoom in on images

How to Find Off-Market Leads

Off-market leads are an incredibly valuable resource for listing agents, especially when they’re newer and still trying to build their network or a reliable lead generation strategy. Focusing on off-market leads allows them to find motivated sellers they can represent before adding the properties to the MLS.

If you’re looking for off-market leads, here’s how you can go about it:

1. Stay in Touch with Industry Professionals

One way to find off-market leads and referrals is to grow your network with relevant experts. For example, divorce lawyers may be able to connect you with homeowners who need to sell quickly as part of their divorce settlement. Probate or bankruptcy lawyers may also be able to refer clients to you.

If you specialize in working with real estate investors, consider building relationships with investors and property managers. They might let you know when a landlord wants to sell one or more of the properties in their portfolio.

Related: How to Become the Go-to Agent for Investors

2. Use Real Estate Data to Identify Off-Market Leads

Just because off-market leads aren’t on the MLS yet doesn’t mean you can’t use data to find them. PropStream’s vast data sets—pulled from MLS and private sources to ensure accuracy—can help you pinpoint potential sellers who may need your services.

Simply search for a particular area and use our unique search filters and lead lists to uncover potential leads. Consider “list stacking” to see if any properties fall under multiple categories.

You can then save your leads to a marketing list to follow up with them later.

Examples of situations you can identify using PropStream include:

• Failed listings
• Pre-foreclosures
• Pre-probates
• Divorce
• Bankruptcy

And so many others!

3. Reach Out to Your New Leads

Now that you have a strong list of homeowners who might be motivated to sell, it’s time to follow up with them. However, instead of pitching yourself in an overly salesy way, try offering to help them reach their goals.

For example, let’s say one of your leads is a tired landlord who owns a vacant, run-down property. Consider crafting your outreach message in a helpful, compassionate tone, offering your services and expertise as a resource in case they’re already thinking about selling their rental property. If you close with an open-ended call to action, they may be more inclined to contact you and discuss their options.

Start Finding Off-Market Leads Today

Although terms like “pocket listings,” “off-market listings,” and “off-market leads” sound similar, remember that off-market leads do not violate the CCP and can be a highly valuable resource for finding properties that aren’t listed yet on the MLS.

Using the tips above, you’ll be better equipped to find these motivated sellers quickly and build a business that can withstand any hardships and market changes!