FROM HOUSINGWIRE: The National Association of Realtors board of directors has banned the controversial practice of “pocket listings.”
While the policy became effective on Jan. 1, 2020 NAR directors delayed implementation until May 1, to give the nation’s more than 800 multiple listing services time to make any technology changes and educate users.
It’s a practice that was surging in competitive markets such as New York, San Francisco, Los Angeles and Washington D.C. It allowed a listing agent to use a multiple listing service to let others know the property was for sale, usually with an informal “coming soon” notice, while not officially sharing the listing and often retaining a full commission.
In San Francisco, the share of homes selling via pocket listings increased 68% between 2010 and 2018, and the trend had been on the rise across the country, according to Redfin CEO Glenn Kelman.
“We know that the policy is a crucial protection for consumers,” said Kelman, who supported the NAR decision, “especially members of minority groups who, research shows, are often the last to find out about pocket listings.”
The new NAR rule requires properties to be listed on the MLS within one business day of being marketed to the public. Specifically, the policy states:
“Within one business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows yard signs, digital marketing on public-facing websites, brokerage website displays, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.”
FROM THE WASHINGTON POST: These unlisted listings may never get to the public multiple-listing service if the broker has a ready, willing and able buyer waiting in the wings.
According to the National Association of Realtors, pocket listings exclude consumers because not everyone has access to the same information about a particular property. And by limiting eyeballs on a property, it’s possible (even likely) you will exclude prospective buyers and the home will sell for a lower price than it would if the largest number of people had a chance to view each property.
Of course, there are times when a pocket listing might benefit a seller. With the continued presence of sites such as Zillow, Trulia, Redfin and others, there appears to be a tug of war going on. These sites make it easy for home buyers to see the starting price for a home, what it previously sold for and how long the property has been on the market. Having said that, having that days-on-market clock start ticking immediately could be detrimental to a seller’s prospects.
At the end of the day, the Realtors are trying to decide whether a seller wants maximum exposure for a listing with all of the information that goes with it online or whether they want a listing to have a more limited audience, with little or no information available publicly. Which way will generate the most money for the seller (and, of course, the listing agent)?
Complicating all of this is the advent of iBuyers and companies such as Opendoor (Zillow and Redfin are also competing in this venue), which offer sellers the opportunity to sell instantly, on the seller’s timetable, for a larger chunk of cash.
We’ll see how things play out over coming months as the Clear Cooperation Policy gets implemented and real estate agents gauge how to work with it and around it.
Written By Kathleen Howley for HousingWire / and Ilyce Glink and Samuel J. Tamkin For The Washington Post