Whisper Listings: Could They be Your Secret to Homebuying?
Open houses, mortgage paperwork, bidding wars: Buying a home can take a lot of effort these days. Some in-the-know prospective buyers, though, may have a special perk: access to properties before they even hit the market.
The practice, known as pocket listings or whisper listings, has become more common in real estate recently, as the market hit full boil during the pandemic.
While this insider access may sound enticing, you may wonder if these listings are legal and have financial implications. Read on to learn the scoop and see whether these listings might help you land your dream home.
What Are Whisper Listings?
Whisper listings are properties that are promoted by a real estate broker to an exclusive group of trusted agents to find a buyer who can pay the desired asking price. In other words, agents utilize their professional networks to sell a property rather than putting it on the market. Prospective buyers outside an agent’s inner circle will likely never know the property was for sale.
A little more detail may help clarify the whisper listings definition:
Whisper or pocket listings are not listed on a multiple listing service (MLS) — the databases real estate professionals use to help clients buy and sell property — even though they’re technically for sale. Popular listing websites like Zillow and Realtor.com source many of their listings from MLS feeds.
You also won’t find a “For Sale” sign in the front yard of a secret real estate listing.
Overall, whisper listings tend to make up a small percentage of real estate sales, but when focusing on top-tier properties, the numbers can rise significantly. Those who are selling their high-priced homes often don’t want to do open houses or otherwise have a lot of people walking through their property. Estimates run as high as 50% to 75% of homes in the highest-price bracket never hitting the market.
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Are Pocket Listings Legal?
Yes, although there are consumer rights and laws that offer some protection to prospective homebuyers. For example, the Fair Housing Act gives buyers the right to be free from housing discrimination during the sale, financing, or rental of a property.
Because of their exclusivity, whisper listings have been criticized as discriminatory. In fact, the National Association of Realtors® established a clear cooperation policy in 2019 with the goal of reinforcing consumer benefits and competition in the housing market.
The new policy requires Realtors to list any property they are marketing to buyers on association-owned MLSs. New listings must be submitted within one business day of any public marketing, meaning other agents should be aware of and able to see the property the following day.
There are some loopholes in the policy that allow whisper listings to continue in specific circumstances. Namely, Realtors can still take advantage of “office exclusives,” which are listings shielded from the public and marketed to their internal agency network. The agents in those offices can then share the property information with their clients.
Listing agents can also take advantage of the one-business-day grace period to promote the property to a select clientele. The policy is that “within one business day of marketing a property to the public,” which can include yard signs and flyers displayed in windows, “the listing broker must submit the listing to the MLS for cooperation with other MLS participants.” Since business days exclude weekends and holidays, the exclusive group of buyers can get a jump on the competition for putting in an offer.
How to Find Whisper Listings
By definition, pocket listings are about connections and insider knowledge. A useful place to start is by finding a real estate agent with a strong professional network and familiarity with the neighborhood you’re hoping to buy in.
Experienced agents may be more prepared to figure out how to find pocket listings thanks to a larger client base, too. Having handled numerous real estate transactions in the community, they could have insight into when former clients want to put their homes back on the market.
They may also know the prices and terms that prior clients would be willing to part with their homes for. Essentially any property can be treated as a whisper listing if you’re able to make an offer on a house that is attractive to the owners — even if they weren’t considering selling.
Is It a Smart Approach to Home Buying?
Real estate whisper listings may be advantageous for buyers for several reasons.
First, there is generally less competition for off-market homes than those listed widely on an MLS, helping buyers purchase a home at or below asking price. This can be especially valuable in a tight or hot housing market.
Given the word-of-mouth nature of pocket listings, potential buyers are generally hand-picked by listing agents based on both their qualifications and the type of property they’re looking for. This approach can cut down on the number of showings in the home buying process, which may be important for some buyers due to privacy and time.
Before committing to this strategy, there are some additional benefits and drawbacks to consider.
Pros of Secret Real Estate Listings
A secret real estate listing can offer advantages to sellers and buyers alike.
For sellers, a pocket listing affords considerable privacy — both in terms of keeping the sale status under wraps and reducing foot traffic at a property. By focusing on qualified buyers in the listing agent’s network, the sale process could be expedited without the hassle of negotiations and contract contingencies.
Sellers may opt for a pocket listing to test out an asking price and gauge interest. If the whisper listing doesn’t secure a full-price offer, sellers can reconsider the price before putting the property on the open market to attract new buyers without any record of a price change. This is helpful since prospective buyers may view a price cut as an opportunity to make an offer under the asking price.
The primary benefit for buyers is reduced competition on a property. Since the listing has only been shared with a select group, it’s less likely that a listing will go into the realm of counter offers and bidding wars.
Cons of Secret Real Estate Listings
Now, consider the downsides of pocket listings:
Whisper listings are often pursued in the hope of fetching top dollar from buyers. From a buyer’s perspective, the perk of first dibs on a property may come at the expense of an accurate assessment of its value and the ability to negotiate a house price. Putting aside the allure of exclusive access is important to ensure that the property fits your needs and makes financial sense.
For sellers, a secret real estate listing limits the potential pool of buyers instead of promoting the property on any of the hundreds of multiple listing services and across major real estate sites. Opening a property to the market can increase your chances of a multiple-offer situation and getting bids over the asking price.
While a pocket listing may reduce the hassle of multiple showings, the approach could extend how long it takes to find a buyer for the price you want.
The Takeaway
A whisper listing, also known as a pocket listing, is shared only with an exclusive group of an agent’s inner circles. Secret real estate listings can offer advantages to both sellers and buyers: The seller has privacy and perhaps a better-qualified pool of prospects, while buyers may face less competition. There are also drawbacks, however, as these listings may present pricing and timing challenges.
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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.
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‡SoFi On-Time Close Guarantee: If all conditions of the Guarantee are met, and your loan does not close on or before the closing date on your purchase contract accepted by SoFi, and the delay is due to SoFi, SoFi will provide you $2,000.^ Terms and conditions apply. This Guarantee is available only for loan applications submitted after 6/15/22 for the purchase of a primary residence. Please discuss terms of this Guarantee with your loan officer. The property must be owner-occupied, single-family residence (no condos), and the loan amount must meet the Fannie Mae conventional guidelines. No bank-owned or short-sale transactions. To qualify for the Guarantee, you must: (1) Have employment income supported by W-2, (2) Receive written approval by SoFi for the loan and you lock the rate, (3) submit an executed purchase contract on an eligible property at least 30 days prior to the closing date in the purchase contract, (4) provide to SoFi (by upload) all required documentation within 24 hours of SoFi requesting your documentation and upload any follow-up required documents within 36 hours of the request, and (5) pay for and schedule an appraisal within 48 hours of the appraiser first contacting you by phone or email. The Guarantee will be void and not paid if any delays to closing are due to factors outside of SoFi control, including delays scheduling or completing the appraisal appointment, appraised value disputes, completing a property inspection, making repairs to the property by any party, addressing possible title defects, natural disasters, further negotiation of or changes to the purchase contract, changes to the loan terms, or changes in borrower’s eligibility for the loan (e.g., changes in credit profile or employment), or if property purchase does not occur. SoFi may change or terminate this offer at any time without notice to you. ^To redeem the Guarantee if conditions met, see documentation provided by loan officer.
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States With The Highest (& Lowest) Average Student Debt In 2024
It can be hard to wrap your mind around the size of college student debts in America. When you’re talking about education-financing trends, the numbers are … huge. Exceeding $1.7 trillion as of January 2024.
How did this happen? Experts say that as it became more and more common to pursue a college degree, the federal government made accruing student loans fairly easy to do and tuition has skyrocketed since 1980. The National Center for Education Statistics (NCES) data — as adjusted for inflation — confirms the average cost of tuition, fees, room, and board at U.S. colleges increased 166% over the last four decades using 2022 constant dollars based on the Consumer Price Index.
These forces seem to have strengthened one another, leading to what some describe as a crisis. Student loan debt is now the second highest consumer debt category in the nation, according to TransUnion®. It is second to mortgage debt and ranks higher than credit card or auto loan debt.
In August 2022, President Joe Biden said that over time “an entire generation is now saddled with unsustainable debt in exchange for an attempt, at least, at a college degree. The burden is so heavy that even if you graduate, you may not have access to the middle-class life that the college degree once provided.”
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According to the latest statistics, over 40 million Americans owe $1.7 trillion in student loan debt. The vast majority of this debt is made up of federal loans.
In March 2020, a pause was put on payments on federal student loans due to hardship caused by the COVID-19 pandemic. The federal student loan pause ended in the autumn of 2023 as required by the Fiscal Responsibility Act of 2023.
The three-year-long pause included the following relief measures for eligible loans:
- a suspension of loan payments
- a 0% interest rate
- stopped collections on defaulted loans
The payment pause freed up cash in the budgets of millions of Americans. But the pause also cost the federal government more than $100 billion.As part of the debt ceiling bill negotiated by President Biden and Congress, student loan interest accrual resumed on Sept. 1, 2023, and required payments resumed in October.
The average student loan debt in the U.S. is about $35,000 per borrower, according to TransUnion. In general, it can take 10 years or longer to repay your student loans.Here are the states with the highest overall federal student debt balances as of June 30, 2023:
1. California
Balance (in billions): $149
Borrowers (in thousands): 3,985.7
Average Balance: $37,384
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Balance (in billions): $127.2
Borrowers (in thousands): 3,183.6
Average Balance: $33,354
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Balance (in billions): $105.4
Borrowers (in thousands): 2,724.7
Average Balance: $38,683
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Balance (in billions): $94.9
Borrowers (in thousands): 2,498.1
Average Balance: $37,989
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Balance (in billions): $70.6
Borrowers (in thousands): 1,690
Average Balance: $41,775
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Here are the states with the lowest overall federal student debt balances as of June 30, 2023:
1. Wyoming
Balance (in billions): $1.7
Borrowers (in thousands): 56
Average Balance: $30,357
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Balance (in billions): $2.4
Borrowers (in thousands): 68.7
Average Balance: $34,934
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Balance (in billions): $2.7
Borrowers (in thousands): 90
Average Balance: $30,000
DenisTangneyJr/istockphoto
Balance (in billions): $3
Borrowers (in thousands): 78.8
Average Balance: $38,071
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Balance (in billions): $3.8
Borrowers (in thousands): 119.7
Average Balance: $31,746
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The 2022 Survey of Household Economics and Decisionmaking (SHED) found most student loan borrowers with outstanding debt owed less than $25,000 on their educational loans.
Students loan borrowers who completed an undergraduate program in 2018 owed the following amounts of education debt on average, according to the National Postsecondary Student Aid Studies (NPSAS) data:
- Undergraduate certificate recipients owed an average of $14,800
- Associate degree recipients owed an average of $20,900
- Bachelor’s degree recipients owed an average of $27,500
Once students graduate, drop below half-time enrollment, or leave school, their federal student loan goes into repayment. However, if they have a Direct Subsidized, Direct Unsubsidized, or Federal Family Education Loan, they have a six-month grace period before being required to start making regular payments. They’ll have a nine-month grace period if they’ve got a Perkins Loan.
When you scrutinize the student debt average for graduate school, the amount can be staggering. Student loan borrowers who completed a graduate program in 2018 owed the following amounts of education debt on average, according to the National Postsecondary Student Aid Studies (NPSAS) data:
- Master’s degree recipients owed an average of $71,800
- Doctor of Philosophy (PhD) and similar research-driven doctoral degree recipients owed an average of $112,400
- Professional practice doctoral degree recipients (such as medical doctors and law school graduates) owed an average of $185,100
In almost all cases, graduate or professional students are considered independent students for the purposes of completing their FAFSA® form for grad school. This means graduate students generally are not required to provide parent information.
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Unless you qualify for student loan forgiveness, borrowers are expected to pay off student debt over time. The way it begins: your loan servicer will provide you with a loan repayment schedule that states when your first payment is due, the number and frequency of payments, and the amount of each payment.
Your billing statement will tell you how much to pay. Your monthly payment amount depends on your repayment plan. If you signed up for electronic communication, pay attention to your email. Most loan servicers send an email when your billing statement is ready for you to access online.
On its Federal Student Aid website, the U.S. Department of Education issues the following statement: “REMEMBER: Your federal student loans can’t be canceled or forgiven because you didn’t get the education or job you expected or you didn’t complete your education (unless you couldn’t complete your education because your school closed).”
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To pursue new interest rates and flexibility in repayment time frames, some people choose to refinance their federal student loans with a private loan servicer. You may pay more interest over the life of the loan if you refinance with an extended term.
By comparing student loan refinance rates, loan holders can choose a deal that works for them. The private company pays off the federal loan and begins a new loan with the customer.
There are pros and cons to refinancing. By doing so, private loan holders lose out on some benefits available to those with federal student loans. Those include:
- Losing access to the government’s SAVE program for federal student loans, an income-driven repayment plan that can significantly decrease your monthly payment amount compared to all other government repayment plans.
- No interest accumulation on subsidized student loans during periods when payments are deferred
- Access to repayment plans based on your income that provide loan forgiveness once you have been in repayment for 20 or 25 years (or earlier for some SAVE Plan enrollees)
- Access to various forms of loan forgiveness and discharge, such as Public Service Loan Forgiveness, Teacher Loan Forgiveness, total and permanent disability discharge, and borrower defense to repayment discharge
The nation’s student debt has grown in recent years, with the average student borrowing $35,000 to pursue a college education. When it comes to grad school, the average PhD candidate can rack up well above $100K in student debt.
What this has led to: student loan debt now ranks as the second highest consumer debt category in the nation, second only to mortgage debt.
Holders of federal student loans could be interested in refinancing loans. However, they must bear in mind that refinancing means that loan is no longer eligible for federal forgiveness or income-driven repayment. You may pay more interest over the life of the loan if you refinance with an extended term.
This article originally appeared on SoFi.comand was syndicated byMediaFeed.org.
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NOTICE: The debt ceiling legislation passed on June 2, 2023, codifies into law that federal student loan borrowers will be reentering repayment. The US Department of Education or your student loan servicer, or lender if you have FFEL loans, will notify you directly when your payments will resume For more information, please go to https://docs.house.gov/billsthisweek/20230529/BILLS-118hrPIH-fiscalresponsibility.pdf https://studentaid.gov/announcements-events/covid-19
If you are a federal student loan borrower considering refinancing, you should take into account the new income-driven payment plan, SAVE, which replaces REPAYE, seeks to make monthly payments more affordable, and offers forgiveness of balances that were originally $12,000 or lower after 120 payments, among other improvements. Also, please note that once you refinance federal student loans you will no longer be eligible for current or future flexible payment options available to federal loan borrowers, including but not limited to income-based repayment plans, such as SAVE, or extended repayment plans.
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