The board of directors of the National Association of Realtors (NAR) voted last month (11-11-19) to ban the controversial practice of “off-market” and “pocket listings”… so named because listing agents keep them in their pocket, making them available only to specific buyers or agents instead of listing them on the MLS for everyone to see.
The goal of the new policy is to bring all available properties into the MLS, giving every seller maximum exposure of their property and giving every buyer access to all properties for sale in their community.
With the continued inventory shortage, keeping listings off the MLS for private promotion has grown in recent years. In San Francisco, for instance, pocket listings increased 68% between 2010 and 2018.
Pocket listings are often embraced by sellers who want to avoid a frenzy of showings which often happens when a property is newly listed in the MLS, and a chance to test the market before putting it on the open market. Buyers welcome the chance to see a property before anyone else and potentially avoid multiple offer situations. Realtors like the opportunity to market directly to buyers and possibly bypass other Realtors by advertising on sites such as Zillow before listing in the MLS.
The problem is, buyers already frustrated by the shortage of homes for sale are further vexed by the thought that they are missing out on many properties that sell before ever hitting the market.
The president of the Minneapolis Area Association of Realtors estimates that pocket listings in the Twin Cities represent about 5% of all listings… but the perception is that the number is much larger and buyers are frustrated.
The new NAR rule requires that properties be listed in the MLS within one business day of being marketed to the public, which can include flyers, yard signs, websites, email blasts, etc. This rule becomes effective January 1, 2020, with implementation delayed until May 1, 2020.
The restrictions are not absolute. For instance, office exclusive listings may be allowed and exceptions are allowed for high-profile sellers concerned about privacy… but they can only be marketed with one-to-one promotion within a brokerage.
The Twin Cities market initiated ‘Coming Soon’ listings in the MLS about a year ago, partly to combat non-MLS coming soon listings on sites such as Zillow. Although still not extensively used, I have seen this as a positive in our market… leveling the playing field by making these listings available to everyone searching the MLS. It a plus that agents can schedule showings for when the listing becomes active while in coming soon status. It relieves some of the pressure of buyers having to schedule a showing immediately when a new listing hits the market… and provides good advance market exposure for sellers. Hopefully this new rule will encourage more extensive use of ‘Coming Soon’ status instead of more office exclusive listings.
Sharlene Hensrud, RE/MAX Results – shensrud@homesmsp.comÂ
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