I have a friend in Washington DC looking for a home for his new family, and he’s been texting with me for some advice in choosing a Realtor. He was concerned that not going with a certain Realtor from a certain new large brokerage would mean he wouldn’t be able to access their pool of private listings the agent had mentioned. In response, I thought I’d share a little about the Clear Cooperation Policy and what it means to consumers who worry about fair access to the real estate marketplace.
In November of 2019, the NAR board of directors adopted the Clear Cooperation Policy in response to concerns about the use of pocket listings. This reinforces the consumer benefits of cooperation, and ensures that the MLS is an efficient and transparent marketplace that is pro-competitive and pro-consumer. In recent years, there has been significant growth in the use of pocket listings and misuse of various limited exposure marketing tactics. Brokers did this in response to historically low inventory and high demand in popular areas like Nashville.
Some brokers would claim their clients required privacy, but would then publicly market the listing on their own website or in social media groups to a limited number of people without sharing it on the MLS. Pocket listings have generally benefited the listing firm more than the client, as quick off-market deals are great for the agent, but only ok for the seller, since they don’t receive the benefit of exposure to a wider marketplace and the attendant competition in bidding. Obviously, this was almost all bad for a buyer who didn’t know the right Realtor. Other brokers would list the property as “coming soon” but then allow a select few buyers, sometimes their own clients, to view and offer on the property before the rest of the public.
These situations also raised concerns about equal opportunity and the Fair Housing Act of 1968, which the NAR and all Realtors have to take seriously.
Keeping properties off the MLS disadvantages buyers, but also sellers, particularly in a hot market like Nashville. With the Clear Cooperation Policy in place, both buyers and sellers have access to the most comprehensive and fair marketplace for real estate through the NAR and their own personal Realtors. Listing brokers must submit property listings to the MLS within one business day of publicly marketing a property. Are there brokerages trying to game the system and still use pocket listings within the framework of the Clear Cooperation Policy? A few, but most of their clients want exposure to the full marketplace too. You won’t be missing anything of note. You can rest assured that you have the same opportunities as other consumers, no matter who you choose as your Realtor.
If you have questions about buying or selling, I’d love to speak with you.
James has been working with our buyers since 2014. Clients love his forthright demeanor and quick wit. In his free time he enjoys cooking, tabletop games (he’s an unapologetic geek), and sipping single malt scotch.
Quick question, to say the least. There is a pocket listing market in Blount County and Sevier County. Honestly, it’s extremely frustrating for my wife and I. We are trying to move from FL to TN, to be closer to family, but it’s proving to be a nightmare. There have been 3 pocket listings just this week that were potentially taken from us. We have an honest hard working realtor, but is there some way to combat this situation or report it? We have been looking for over 3 months with no luck and houses saying coming soon, but before they hit the market are already pending. Any insight would prove to be beneficial. Thank you.
Unfortunately, East TN is outside of our MLS so they may have entirely different rules there. In Nashville, this happens too. Here are the various culprits:
1. Someone saw the Coming Soon, called the listing agent, and booked an early appointment. In Nashville, you aren’t supposed to let anyone inside unless you are in Active status, but people do it all the time. We have “rules”, but they’re mostly lip service. No one is tasked with enforcing them. If the seller tells the agent to “let me in”, the agent’s going to follow their instructions. These rules are more customs than laws.
2. The seller signed a waiver. In our MLS, we have a form that sellers can sign that allows their agent to privately shop their deal outside the MLS – sometimes this is specific to an office and is called an Office Exclusive. Say you have newborn triplets, or someone hospicing at home. Sometimes you just don’t want 100 people coming through in a weekend.
3. People are sending sight-unseen offers. Agents are bound by our code of ethics to present offers in a timely manner. It happens sometimes that the listing agent will receive an all-cash or contingency-free offer and the seller just decides to go for it.
We know from experience that sellers make more money when they expose the property to the open market, but ultimately the seller can opt to sell to anyone, any time.