On May 1st, the Santa Fe Association of Realtors adopted the National Association of Realtor’s Clear Cooperation Policy for Multiple Listing Services. All those “Coming Soon” signs will no longer be seen as NAR combats the use of off-market MLS listings. An off-market listing is equivalent to a pocket listing or a waiver listing. This type of listing typically occurs when a broker has signed the paperwork to list, but the property is not going into the MLS for a period of time. Legitimate reasons include upgrades and repairs to the property as well as move-out by the owners and so forth. But, when inventory has become so tight that a sign in the yard can be the catalyst for a sale, some brokers have taken advantage. They have used this period to advertise the home to their sphere and within their office and many homes have sold even before hitting the MLS. This type of sale does not always yield the best price for the seller.
The Multiple Listing Service allows the greatest exposure a property owner can receive when they desire to sell their home. Realtors pay dues to be both a member of the National Association of Realtors which adheres to a Code of Ethics, but also to their local association to maintain their local and distinct Multiple Listing Service. Listing agreements have terms that brokers must adhere to and one is the seller’s participation in the local MLS. Rules of local MLS’s vary, but in Santa Fe it is customary to put a listing into the MLS within 2 business days from the date of the signature of a listing agreement or the term of that agreement, whichever is later. For a Realtor, the Multiple Listing Service provides clear cooperation and understanding of what a participating broker will be paid if they bring a buyer. For a person who is self-employed, the guarantee of compensation is important. If a broker just shows a house on Zillow, for example, and that property is not in our MLS, there is not a guarantee of payment or compensation. And if you have a buyer’s broker with a contractual agreement, the broker can come back to the buyer for compensation if it is stipulated in the contract.
But the Clear Cooperation Policy was not adopted by NAR for Realtors. More importantly, the National Association of Realtors felt that leaving listings off MLS’s was undermining the consumers. While the seller may feel that their did a great job selling the home in just under 3 hours to a passerby or to a fellow broker’s client in their office, what might have the seller achieved had the property been available to many prospective buyers? Market value in many cases has been the most successful bidder and selling prices have been well over asking in tight housing markets. Pocket listings have traditionally benefited the brokerage more than the client. Some Realtors had misused the “Coming Soon” to allow their own buyers first shot at securing the property while telling the public and other brokers the property would be available at a later date. This type of abuse is not in the consumer’s best interest and the misdeeds of a few can give all Realtors a bad name. This type of selective service has also raised issues of Fair Housing violations and additionally, has skewed market data.
The Clear Cooperation Policy requires that a real estate broker must put their listing into the MLS within one business day of marketing to the public. That means that flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public which includes social media. NAR believes this move will insure an efficient and transparent marketplace that benefits both buyers and sellers. Further, the National Association of Realtors believes this policy will provide uniform standards for advertising allowing homeowners’ the greatest benefit of market exposure.
So, it is likely that you will not again see a “Coming Soon” sign here in Santa Fe but that is OK. If you see a sign go up in your neighbor’s yard, that broker has one business day to put that property into the MLS. Business days do not include Saturdays, Sundays, or legal holidays so there is still opportunity for exploitation by some. This new guideline does not prohibit waiver listings, so it is still possible for homeowners to choose not to be on the MLS. However, those that do will have the greatest satisfaction and exposure of the entire market to yield the greatest outcome to their sale.