The Power Broker Roundtable is brought to you by the National Association of REALTORS® and Steve A. Brown, NAR’s Liaison for Large Residential Firms Relations. This column addresses broker issues, concerns and milestones.
Steve A. Brown, Liaison for Large Residential Firms Relations, NAR
David Cabot, President/CEO, Berkshire Hathaway HomeServices, San Diego, Calif.
Chad Ochsner, Owner, RE/MAX Alliance, Denver, Colo.
Jeff Sposito, President, J. Rockcliff REALTORS®, Danville, Calif.
Steve A. Brown: Maybe it started with the shortage of inventory. Maybe it was the lure of exclusivity…and maybe it was dollar signs in the eyes of a few unscrupulous agents. Whatever it was, the rise of “off-market,” “coming soon,” and “pocket listings” is quickly becoming one of the hottest issues in our industry. How do such listings impact sellers? Buyers? How are brokerages and associations reacting to the practice, and what about policies or guidelines? David, this has been a topic of interest in California. What’s your take on the issue?
David Cabot: I personally think it’s bad business and I don’t permit it in my company. Off-market listings create an underground market that doesn’t help anyone but the listing agent and damages the industry as a whole. I think the practice gained a little traction as a way to control inventory when listings were really scarce, but it kind of peaked, at least in Southern California, in 2012 or 2013, and I believe it’s continuing to wane.
Chad Ochsner: It’s a hot-button issue for me, as it should be for every agent who has their client’s best interest at heart. There have always been exclusive listings on a small scale, mostly in the high-end when, for example, a Federal judge or a famous ball player asks to stay off the MLS. That says, pocket listings limit exposure, restrict access by bona fide buyer agents, and can fly in the face of industry ethics and MLS rules and regulations. It’s the reason why the Colorado Real Estate commission was one of the first to establish a position statement putting REALTORS® who are abusing the system on notice.
Jeff Sposito: Sad to say, we’re still seeing a lot of pocket listings in the peninsula and other high-end San Francisco Bay properties—as many as one in four home sales, according to the California Association of REALTORS®, which is warning agents to tread carefully. They’re not illegal, but as David pointed out, they are hardly in the best interest of sellers and they’re undermining the agent cooperation that’s always been at the heart of the industry. As I see it, it’s clearly greed on the listing agent’s part—and the “coming soon” advertisements popping up in the online media are adding fuel to the fire.
SAB: NAR has made it clear that protecting the interests of our clients is job one, and that brokers must adhere to the NAR Code of Ethics when advising clients on whether or not to advertise properties as “coming soon.” For now, what can brokers and owners do to keep pre-market, off-market and so-called pocket listings from tarnishing our professional trust?
DC: Articles and company brochures need to remind sellers that an agent is duty-bound to represent the client’s best interests and that withholding a listing from the MLS restricts marketing opportunities and severely limits the pool of buyers. And brokers need to inform their agents about the misuse of pocket listings and the potential for violating MLS rules and/or the REALTOR® Code of Ethics.
CO: The same is true at the association level. The common rule is that to comply with MLS rules, a property must be filed with the MLS within 48 - 72 hours after the listing is signed. Unless the seller has instructed otherwise in writing, not doing so is clearly a breach of ethics.
JS: Unfortunately, we can’t take the right to decide away from the seller—and greed is a powerful motivator for agents who are willing to work the angles. Discipline is a start…and reinforcing the rules. NAR’s position on “coming soon” advertising is a very welcome start.
SAB: A very welcome start, and one that needs to be replicated by every REALTOR® association in the country, coupled with education and enforcement. A 2011 Gallup poll reports that real estate agents are seen as trusted professionals by more than 73 percent of responders. That’s a healthy number we want to see improve.
For more information, visit www.realtor.org.
Reprinted with permission from RISMedia. www.rismedia.com. Copyright 2014. All rights reserved.