Local professional real estate groups are applauding the National Association of Realtors’ decision Tuesday to try to curb the practice of pocket listings.
“If you join the MLS, you agree to be a cooperative broker. If you hold pocket listings so that one agent or one company can control the transaction, that’s anti-competitive,” said Jim Major, president of the Greater Boston Association of Realtors.
NAR’s board of directors voted 729 to 70 at its Nov. 11 meeting to approve its “Clear Cooperation” policy, which requires brokers who participate in a multiple listing service to submit their listing to their NAR-chartered MLS within one business day of marketing the property to the public.
Under NAR’s new definition, “marketing to the public” includes everything from yard signs to fliers in windows and marketing material posted on public-facing websites, to email blasts and multi-brokerage listing-sharing networks. All MLSs owned by a local boards of Realtors must adopt the NAR policy by May 1, 2020. The privately-owned MLS PIN is not covered by the move, but MLSs covering Berkshire County and Cape Cod and the islands are.
“The bulk of our members like the intent and the goal of it; some of them don’t like the exact language. They’re concerned about how it plays out with sellers who want privacy,” said Ryan Castle, CEO of the Cape Cod & Islands Board of Realtors. “We believe that MLS inclusion is the best marketing a property can have. Exposure to the largest amount of buyers possible generates the best price possible.”
Pocket listings on the Cape and Islands have tended to fall into two categories, Castle said: high-end listings where sellers place a premium on avoiding any publicity about their home sale, and homes priced between $350,000 and $500,00 where the listing agent has been seemingly concerned with lead generation.
With its carve-outs for sellers who specifically ask that their listing be kept off MLSs, the new NAR policy is chiefly targeted at the latter type of listing, Castle said. In these cases, brokers tended to use tools like Facebook ads and yard signs to market the properties, he said, creating the potential for Fair Housing Act violations.
“If you’re only marketing it to your sphere, in a world where you still see fair housing issues, we can’t ignore the implications of the way [some people] are marketing,” he said. “We do a better job in this industry of cleaning it up ourselves, and this is an area where we saw a developing issue and wanted to nip it in the bud.”
Academic studies have shown immigrants and people of color tend to be excluded by pocket listings.
“These are the ones who don’t belong to the club, who don’t know the secret handshake, or the obscure website, or the private Facebook group, or the right agent,” Redfin CEO Glenn Kelman wrote in a recent blog post supporting the Clear Cooperation policy.
Castle said the Cape & Islands Association of Realtors formed a task force Wednesday to determine how best to implement the new NAR rule for its MLS by the May 1 deadline. The rule’s broad text will allow it and other MLS organizations to adapt the mandate to local conditions, he said.
The bulk of the state’s real estate market is covered by MLS PIN, which as a privately held organization is not subject to NAR’s ruling. However, MLS PIN has had a similar policy to NAR’s new rule for some time. Members are required to notify a seller who doesn’t want their sale to be listed that doing so could make it invisible to the roughly 38,000 real estate professionals who subscribe to the service, Chief Strategy and Marketing Officer Melissa Lindberg told Banker & Tradesman in an email.
“Although MLS PIN is not NAR-chartered and it is not required for us to administer this new policy, the MLS PIN board of directors and senior management will follow this update closely to determine how it may effect MLS PIN customers and what action we will take,” she said. “We have asked MLS PIN customers to watch for updates directly from us in the weeks and months to follow.”
The service also recently implemented a “coming soon” status on the system, which allows agents to tease a home on MLS PIN that needs renovations or staging before it can be shown, but where the seller is ready to sign a listing agreement. The agent can then lock in their relationship with their client while also complying with MLS PIN’s policy that all listings must be added to the service within 24 hours of being first marketed to the public.
