At the Joint Meeting of the Multiple Listing Service Forum and Multiple Listing Issues and Policies Committee Thursday, all things MLS were on the table. In fact, even items that weren’t on the MLS were up for discussion–specifically, so-called “pocket listings.”
Credit: Daniel Moyle
“Clearly they’re not ‘off the market,’ nor are they in your pocket. They’re not on the MLS,” clarified Robert Bailey, 2013 chair of MLSlistings Inc. in California. Bailey presented attendees with research on the growing number of homes for sale in his local area that never make it to the MLS at the REALTORS® Midyear Legislative Meetings & Trade Expo.
In a study comparing public records with MLS listings in the California communities of Monterey, San Benito, San Mateo, Santa Clara, and Santa Cruz, Bailey found that off-MLS listings increased from 12 percent in 2011 to 15 percent in 2012 to 26 percent of the market in the first quarter of 2013.
Supporters of pocket listing practices often cite situations where sellers are seeking privacy or are concerned about having strangers view their homes. Bailey said such desires are valid, but the numbers indicate a growing trend.
“Clearly they’re more concerned about privacy and security now that the market has gotten better,” Bailey said, drawing a collective chuckle from the crowd.
When asked what is driving agents to consent to the increase of this practice by sellers, Bailey said it’s largely comes down to market changes.
“I have agents who have had a very long, very hard six years,” Bailey said. He posited that some agents are using pocket listings to increase “the ability to capture leads” in a competitive, low-inventory market.
But Bailey cautioned that sellers and agents who resort to this tactic in order to avoid “doing business with the unwashed masses” could run into fair housing issues.
Because of local rules, Bailey noted that disagreement over pocket listings will vary from state to state. But he expressed concern that they could have catastrophic effects on the industry nationwide.
“Could it lead to the collapse of our MLS model as we know it today? Could it lead to the erosion of an agent’s value?” Bailey asked. “There’s not a market that’s exempt from this issue.”
NAR has not defined pocket listings, nor do they have an official policy on the practice. But Bailey urged those present at the joint meeting to avoid them.
“We’ve built our businesses on the basis of if we collaborate together… then we can operate in the best interests of the consumer,” Bailey said. “[We must] maintain our position at the center of the transaction.”
What is a Pocket Listing?