On November 11, the National Association of REALTORS® (NAR) voted to limit how real estate professionals can use "pocket listings," private real estate listings that don't appear on NAR-affiliated Multiple Listing Services.
Pocket listings are used in real estate to test the market and tweak a property's price and marketing before distribution or because an MLS does not support the type of listing the real estate firm is trying to market. For example, we know of several MLS systems that cannot display rentals, and the "pocket listings system" allows the firm to display the listing that their MLS does not support. Many pocket listings eventually end up on MLS, but some don't.
One of the key reasons that NAR has worked on adding this new rule is the public marketing of the listing. Many of the listings are marketed in a variety of ways. Email blasts, "coming soon" announcements, signs, and flyers are just a few methods some sales associates used to promote pocket listings. The internet has made this more practical in today's society.
Private listing networks are a primary concern for this rule. These were often run by a handful of people on closed social media groups, limiting the public's ability to learn about local listings and, in essence, stifling the exposure of the listing to a much broader range of buyers. Sales associates using these methods could avoid working with other associates. They would often end up representing both the buyer and the seller, which NAR sees as a clear conflict of interest. ON NOVEMBER 11 The National Association of REALTORS® (NAR) voted to limit how real estate professionals can use "pocket listings," private real estate listings that don't appear on NAR-affiliated Multiple Listing Services.
NAR's new policy on pocket listings will be adopted under the name "MLS Statement 8.0 Clear Cooperation Policy," to be documented in the NAR Handbook on Multiple Listing Policy. Its approach is simple: Sales associates will be required to submit a property listing to the MLS within one business day of marketing. That includes anything and everything that might be seen by the public, from an online landing page to a yard sign or flyer.
The policy went into effect on January 1, 2020, but local implementation isn't required until May 1, 2020. This gives participants the chance to address concerns with their local MLS and develop the right policies for compliance. The end of pocket listings means buyers and sellers can count on fair representation. They won't be limited to team members from within the same firm or end up represented by the same person.
With both listing and selling sales associates doing their best work for clients, commission money will touch more real estate firms and motivate competition. This is a big deal in markets like Miami, where getting established in real estate is harder. In the long run, the new rule could also help protect real estate markets from overheating. In big cities known for fewer listings than average, pocket listings can contribute to inflated asking prices. Of everyone, sellers may benefit the most. The end of pocket listings means they can be sure their property is being marketed to as many buyers as possible, making a good deal far more likely.
Sales associates in the luxury market take heart: If you have famous clients worried about their privacy, you can still take action to protect them. That includes the ability to maintain "office exclusive" listings, where direct communication between brokers, licensees, and their clients is not considered public advertising under NAR's new rules.
The rule on pocket listings doesn't stop sales associates from sharing a listing within their own office. Also, the new rule does not require that a pocket listing be submitted as an IDX listing to the MLS. The rule states that the listing has to be entered into the MLS within one business day. The listing could remain as an office exclusive or a "Coming Soon" listing.
Many MLS systems are now adding support for "Coming Soon" listings and providing them to the real estate firm for a short time before they become publicly accessible. Also worth noting is that not all listings are subject to this rule. NAR has stated that commercial listings and residential listings are transacted differently, and thus the commercial listings will not be governed by this new rule. Many buyers know about popular platforms like Redfin and Zillow that pull information from the MLS. But most of them never think twice about the idea that they might have to check several websites to find all their local listings. By making things easier and more transparent, the new pocket listing policy is likely to help the average buyer see real estate sales associates as experts they can trust.
By making sure MLS stays the source for listings in any community nationwide, NAR's decision empowers sales associates to flex their marketing muscles. They can simplify their digital strategy by looking at their MLS listings as a kind of "North Star." Better marketing tactics will guard against the most significant objections to the pocket listing policy, too: Sales associates who understand digital marketing will always be able to get attention on listings. That will keep days on the market low and save time in the long run. Digital marketing best practices help real estate pros target and pre-qualify motivated buyers, so sellers get more enticing offers. Yes, a few firms will have some of their programs affected. Objecting to the policy, a handful of firms have gone on record about "pre-marketing" where properties were distributed on a limited list of sites for up to a month before hitting MLS. While this isn't allowed, sales associates still have plenty of ways to gauge how much interest a listing is likely to get. Old-fashioned research on the local market, combined with a commitment to thought leadership, can make any real estate pro an opportunity magnet. What's the bottom line? The pocket listing rule is sure to make waves in some real estate circles. Before long, though, everyone – from sales associates to buyers and sellers – will see a safer, more ethical, and more transparent market.