We’ve received several calls about some Berkshire properties marketed on facebook or via lawn signs as ‘coming soon’. You may have heard these listings called by any number of names: off-MLS listings, office exclusives, refusal to list, or pocket listings. Whatever you call them, they are all properties that are listed for sale with an MLS member but NOT included in the MLS. Listing brokers must not only follow MLS rules for coming soon/pocket listings, but should also be aware of NAR’s caution about following fiduciary law as well, and understand the impact on the industry as a whole.
Understand The Rules
These listings are not prohibited however, all members must always follow the MLS’s Rules and Regulations with regard to them.
- You have two business days after the seller’s signature to either enter a listing OR submit a completed Refusal to List form with the ERTS to Listings@BerkshireREALTORS.org.
- REALTORS® are bound by the Code of Ethics to protect and promote the best interest of the client. Listings that are not included in the MLS usually have limited exposure, potentially resulting in fewer offers and thereby reducing the possibility that your client will get the best and most reasonable price and terms. They should make this as an informed decision..
- Only the seller—never the agent or broker—can decide to exclude a listing from the MLS. And that is why the seller is required to sign the waiver
- The primary purpose of the MLS is to foster cooperation and establish offers of compensation among participating brokers. If the spirit of sharing listing information, compensation and cooperation falters, so will our ability to work collectively on transactions for the good of the consumer and industry.
Are Your Clients Best Interests Being Served?
The National Association of REALTORS® (NAR) has responded to the recent industry discussion surrounding “coming soon” listings by reminding members that, “‘The first important step in advising a seller-client on whether to advertise a property as ‘coming soon’ is to identify the client’s best interests, as defined by that client…Failing to act in the client’s best interest and failing to disclose the pros and cons of a limited marketing plan, such as ‘coming soon’ advertising, can violate state real estate license laws and regulations, MLS policies, and the REALTOR® Code of Ethics.'” You can also read NAR’s guidance for members on the use of coming soon listings. (or watch the following 4 minute legal video from NAR General Counsel).
While our MLS does not prohibit pocket listings, REALTORS® are bound by the Code of Ethics to protect and promote the best interest of the client. Listings that are not included in the MLS usually have limited exposure, prompting fewer offers and thereby reducing the possibility that your client will get the best and most reasonable price and terms.
Most sellers just want the highest price possible for their home. The best way to accomplish that goal is to make sure their home is exposed to the maximum amount of potential buyers. There is evidence indicating that off-MLS listings usually don’t produce the best price for the seller due to limited exposure.
Should your client have privacy or other legitimate concerns and want to keep the listing off the MLS, explain the pros and cons of how this could affect their sale.
Impact to the MLS Community
The primary purpose of the MLS is to foster cooperation and establish offers of compensation among participating brokers. Instead of promoting cooperation, the use of pocket or coming soon listings may discourage and may dampen that spirit of sharing listing information, as well provide no assurance of cooperative compensation should you find yourself involved in a transaction that includes a non-MLS listing.
Outside of the effect these listings could have on your seller, pocket listings also adversely affect information everyone relies on the MLS to provide. Please don’t forget that appraisers rely on the MLS data to create accurate appraisals. Many lenders will not allow non-MLS sales to be used as comparables because those properties were not adequately exposed to the market and, therefore are not an accurate representation of market-driven prices. Brokers and salespersons also heavily use the MLS database to help sellers determine list price and to help buyers determine what they should offer. Sales that aren’t included in the MLS lead to incomplete and inaccurate results.
Stay Compliant, Serve Your Clients
Despite the ongoing industry discussion about on this topic, remember these two things: you are still required to comply with the MLS’s listing entry rules and you have an obligation to act in the best interest of your clients. Keep these two things in the forefront of your mind and you can avoid running into trouble when confronting off-MLS or coming soon listings.
REALTOR® Magazine. http://realtormag.realtor.org/daily-news/2014/06/17/how-avoid-trouble-coming-soon-ads?om_rid=AAB0ys&om_mid=_BToIuFB86uBi-Q&om_ntype=RMODaily. Accessed: 6/18/2014.