The real estate industry often seems to thrive on exclusivity and a lack of transparency, with certain brokers and agencies gaining reputation boosts from having access to in-the-know listings, while certain properties gain the allure of being semi-private.
However, as the term implies, exclusive listings can exclude others, which goes against most realtors’ intentions and ethics and also limits the potential pool of buyers and can artificially make inventory seem limited, which can affect the health of the real estate market.
Soon, however, real estate listings will become more open and accessible, with the National Association of Realtors® recently passing the Clear Cooperation policy. This policy bans so-called pocket listings, where an agent or broker only markets a listing to a select group, rather than sharing the listing across a multiple listing service (MLS) for a wider pool to find. With the passing of this policy, brokers who participate in an MLS must “submit their listing to the MLS within one business day of marketing the property to the public,” as NAR® explains, where public marketing ranges from yard signs to email blasts. The policy will take full effect by May 1, 2020, in order to give MLSs time to accommodate this change.
A More Equitable, Transparent Market
While some brokers and real estate participants may not want to give up their exclusivity, the new policy has the potential to create a rising tide that lifts all boats.
For example, a seller may think that marketing their home to an exclusive group may create a sense of prestige and therefore drive up the price. Although that may occur in some cases, it’s also plausible that listing the property across MLSs would lead to more buyers’ agents identifying the property as a match for their clients, thereby driving up demand.
Greater transparency and access can also lead to quicker sales and provide buyers and sellers with more confidence in their ability to navigate the market, thereby creating a stronger environment. By not artificially limiting inventory, since more listings will be available across the industry, there’s potentially less likelihood of pricing bubbles. If supply seems limited, buyers may overpay, which may help some sellers in the short term, but in the long term it can cause prices to crash if people decide to stay put with their current homes rather than participating in an inflated market. Thus, greater transparency can create a healthier market.
Overcoming Potential Concerns
With the new policy, sellers and agents may worry about losing the ability to market “coming-soon” listings before the property is ready to sell, but some MLSs can accommodate this type of listing and it may still be allowed under local rules. As a result, sellers can potentially still gain exposure before a property is ready for showings. Even if the property is not able to be marketed on MLS as “coming soon”, the new policy does not ban agents from sharing listings around their office or meeting client privacy requests.
Ultimately, the ability to access a wider pool of buyers should outweigh any benefits that came from marketing “coming-soon” listings to exclusive networks. And although the transition to a more level-playing field may temporarily disrupt agents who have built up exclusive networks, this change is part of a wider evolution in consumerism.
Today’s on-demand, always-on culture means consumers expect to be able to get what they want, when they want, in a seamless fashion. Thus, consumers appear likely to increasingly turn to agents or technology services that can match them with the properties they want at a fair price, regardless of whether the listing is exclusive or not. Even if this policy didn’t come to pass, agents and services that can help participants easily navigate the market at a competitive price seem likely to win out over those that just funnel clients into exclusives.
Altogether, NAR®’s ban on pocket listings creates a more equitable, ethical market where buyers will have a more level playing field with access to more homes, and real estate market participants gain the benefits of broader supply and demand pools.
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