Starting May 1st, No More Pocket Listings

The National Association of Realtors (NAR) made the announcement late last year that the marketing of off market homes, known as “pocket listings,” are officially prohibited effective May 1^st across the country. Pocket Listings are homes that are not actively marketed in the Multiple Listing Service (MLS).

The rule states that as soon as a Realtor® does any form of public facing marketing (anything from an email sent out to a For Sale Sign out front), the Realtor must post in the Multiple Listing Service within one business day.  A Realtor® can market the home within their office without having to post it in the MLS.

The Clear Cooperation Policy as it is called, was developed with the following thoughts in mind:

• By having properties in the MLS, it provides accurate information as to what is happening in the market.
• Although there is a clear form that states the risks with listing homes off market, NAR claims that some sellers still do not understand the full repercussions of listing as a pocket listing.  The primary concern is not receiving full market exposure, thus possibly not getting fair market value.
• There is an argument that it is leaving other agents out, as not all agents will know about the home for sale as the listing agent may never have reached out to them. Therefore, leaving some agents out of it when in fact they may have a buyer and struggling to find homes in an already low inventory market.

So, what are some compliant work arounds? Here’s what we know:

• A seller could post a “Coming Soon” listing on a Friday, giving through the weekend before having to post in the MLS.
• Some MLS services (such as those in Los Angeles) allow you to post a listing as “Coming Soon” for a max of 21 days.  It is their version of a compromise.
• It can be marketed within the listing agent’s office. 

We have represented clients in both the buying and selling of off market homes.  From a seller’s perspective, if they got their desired price and terms, it avoids the multiple showings, open houses, and “lookie loos.”  Especially if privacy is their concern.  For buyers, they appreciated it as it gave them a competitive edge and not have to deal with multiple offers or if they too, value their own privacy (such as celebrities and high net worth people).

Giving informed clients clear choices works very well. Previously that included the option of pocket listings.  My prediction?  Some Realtors will continue to do it until they get caught and fined. However, time will tell.

So what are we doing?  Here’s our strategy for our clients:

• If looking to sell, we will monitor buyer inquiries, both from our internal proprietary database and from Realtors® who post in our various networking groups.  Depending on the circumstances, we would also post as “Coming Soon” in the MLS so that it doesn’t get syndicated to the public facing websites (such as Zillow, Trulia, and others), but still complies.
• For our buyers, we will continue to reach out in our Realtor network to see if anything is coming soon.  We will be networking, calling, texting and more to see what’s available so that you get a clear idea of true inventory.

We will see how this progresses and obtain true reactions from sellers and buyers where privacy is important to them.  There may also be push back from Realtors® and others in higher priced areas such as in New York, Los Angeles, and San Francisco, where pocket listings may be more prominent.