Realtors prohibit private listings
The National Association of Realtors on Monday approved a policy that would essentially put an end to so-called pocket listings, the practice of shopping real estate listings privately, without posting them on a Multiple Listing Service for the public to see.
The new rule requires agents who sell through Multiple Listing Services, such as the Houston Association of Realtors’ service, to submit their listing to the MLS within one business day of marketing the property to the public, whether that’s with a sign in the yard, an email blast or a Facebook post.
The new rule is a victory for consumers, said Shadrick Bogany, a Houston agent and former HAR chairman.
“Sellers now have properties exposed to everybody, and buyers now have access to everything,” said Bogany, who chairs the NAR group that drafted the proposal. The rule change was overwhelmingly approved by the association’s board during its annual conference, which was held in San Francisco and ended Monday.
The rule goes into effect Jan. 1, but MLSs will have until May 1 to fully adopt the policy. For Houston’s MLS, Bogany said, that means introducing a “coming soon” policy. Other MLSs across the country compile listings on their public facing websites that allow agents to promote properties before they are ready to show or sell.
Now, Bogany said, “if you put a sign in a yard that says ‘Coming soon,’ it needs to be in the MLS.”
The policy does not prohibit agents from taking office-exclusive listings, those that are shared within a particular agency. But once a listing broker advertises a property outside their brokerage firm, it must be on the MLS the next day.
Penalties are to be defined by each local association. The fine for noncompliance in the Washington, D.C., area, which implemented a similar policy last month, is $5,000.
Foes of the NAR rule argued that sellers should have a choice in how they market their home.
Compass, a real estate firm that provides “coming soon” listings on its website before the properties hit the MLS, has defended the practice. It wrote a letter threatening to sue an MLS in the Mid-Atlantic region after it instituted a policy similar to NAR’s.
Pocket listings have been around for years, but the practice grew during the last housing boom when homes sold quickly at high prices. In such cases, properties would go under contract and then hit the Houston Association of Realtors’ website as “pending sales.”
The pocket listing term comes from listing agents holding properties “in their pockets.” As many as 10 percent nationally and as many as 30 percent in certain markets are pocket listings, estimates show.
Bogany said the new rule has broader implications for the housing market.
“I think it’s a victory for fair housing because pocket listings allow me to exclude who I want to show that property to,” Bogany said. “If it’s a pocket listing and I’m trying to keep River Oaks white, I’m not going to show it to anybody of color.”