Clear cooperation means you are obligated to cooperate with other MLS members on the sale of your listings – BUT – office exclusives are the exception. While ‘office exclusive’ isn’t necessarily a new term to the real estate market, we’ve had some questions about how to correctly handle this scenario. There are some cases, outlined below, where your seller will opt to hire your firm solely to sell their home – an office exclusive – and keep the marketing and sale confidential to your firm. Perhaps they want it kept “quiet”, or they don’t want “a bunch of people traipsing through their home”, or maybe they already have a buyer in mind. As long as you’ve fully explained the pros and cons of that type of arrangement, you can enter into an Office Exclusive addendum (and file with the MLS office staff!). Then you are allowed to only share the property privately with buyers working with your real estate office. Please remember, an office exclusive must stay private to your own office – if you want to cooperate with ONE agent outside of the office, you MUST cooperate and offer that property to ALL agents and enter the listing in MLS!
How can you ethically and correctly accept an office exclusive? If allowed by your broker, this can be an option offered if your seller has indicated they don’t wish to market their listing in the MLS, have a desire for privacy, or simply want to keep this sale in-house. You must explain the benefits of marketing through the MLS to cooperating brokerages to gain the best exposure for their property. Specifically, the MLS is the largest, most comprehensive source for sharing property information with other REALTORS and their buyers. The national average of homes sold through the MLS with another brokerage is 87%. That’s a big faction of buyers who are not viewing the sellers’ home if they choose to keep their listing out of the MLS – and potentially resulting in lower sale price without time on the market to determine true value. The MLS also uploads listings to the internet at the agent’s direction, expanding potential buying power outside of the Berkshire marketplace and outside of the sphere of buyers that can be brought solely by the listing brokerage.
If, after explaining this, your seller wants to keep it “quiet”, but doesn’t object to other brokers bringing qualified buyers to view and make offers, perhaps you don’t need an office exclusive. Simply take the listing as usual and exclude the listing from appearing on the internet. During your data entry, the final tab is called Broker Distribution. Go to this tab and select the option that most appeals to your seller. Do they just want to keep the address confidential, exclude it from certain sites, or stop it from appearing on the internet entirely (this includes IDX feeds, syndication sites, etc)? These options allow you to share the listings with other MLS members and their clients, without the unwanted marketing on the internet. Win – Win!
A few more things to consider if you go the full step of entering into an Exclusive Right to Sell with an Office Exclusive addendum – Ensuring the seller is fully informed and that you are following the lawful instruction of your client is part of your fiduciary obligations. Using the Office Exclusive Addendum alters the exclusive to the extent that you will not be entering the property into the MLS within 2-business days, offering compensation to cooperating brokers or cooperating with other brokerages and severely limiting marketing exposure. The addendum, if well explained, also protects you by clearly outlining the benefits that the seller will not receive and has an acknowledgement that the decision was solely theirs.
Here’s the thing. This means you cannot reach out to your colleagues through phone, text, email, social media, at a social gathering, and so on to secure a buyer. The seller also acknowledges that they understand that should any party, SELLER or broker, publicly market the property that the broker is obligated to enter the property details into the MLS, with at least one photo and within one business day of such marketing.
Remember the NAR’s MLS policy of clear cooperation. The very basic rationale of this policy is to keep the REALTOR at the center of the transaction and provide all MLS participants and users a fair and level playing field by offering all buyers the same opportunities to view available properties for sale. Individually contacting colleagues that you believe may have buyers is a clear violation of this policy. Marketing the property on social media by either the seller or the broker also targets those individuals who are ‘friends’ and limits the pool of buyers; also a clear violation of the policy.
To wrap up, the Office Exclusive has a very important niche in the marketplace. But, be careful that you fully understand the limitations of marketing and that your seller is on board with this before entering into the agreement. As always, we’re happy to answer your questions if you have any -and encourage you to discuss this with your broker if you are unsure!