Over the past couple of months, I have written a couple of articles about a new policy approved by the National Association of REALTORS® in November 2019 known as the “Clear Cooperation Policy”. While I’m not sure how closely consumers are watching, or if they even care at all about the policy at this point, REALTORS® have definitely been following the policy and have been pretty vocal about their thoughts on the policy, both for and against.
Before I go on, I should disclose that I currently serve as Chairman of the Board for MARIS (Mid-America Regional Information Systems) which is the Multiple Listing Service (MLS) that serves St Louis area REALTORS® as well as several other markets throughout the state of Missouri. In addition, I’m a broker-owner at MORE, REALTORS®, arguably one of the most technology-forward real estate brokerages and a leaders in the digital marketing world, so I have strong feelings from both sides of the fence, so to speak.
Now, back to the new policy, MLS 8.0 as it is known in the industry. For members of MARIS, which, as I mentioned, includes all REALTORS® throughout the St Louis metro area, the new policy goes into effect on April 28th.
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So what is the new MLS policy and how will it affect consumers?
From a buyers perspective, I think the new rules are a benefit in that there will be more transparency with regard to listings that are on the market, or are listed and will be available soon, to both them as well as their buyer’s agents. The reason for this is, under the new rules, listing agents will be required to put all listings in the MLS within one business day of doing any marketing which would include putting a for sale sign (or coming soon sign) in the yard. While “putting it in the MLS” doesn’t mean they have to make the listing information publicly available (that is an option) but they have to at least enter it as “coming soon” which means that the roughly 14,000 agents that are members of the regional MLS (MARIS) will be aware of the listing and have access to information on it including the listing agent information. In fact, the only way a listing agent will be able to avoid letting other agents know about their listing is by giving it a “withheld” status in the MLS, which means no one outside that agents office, would be aware of the listing and there cannot be any marketing done at all not even a for sale sign in the yard.
From a sellers perspective, I don’t think there are really any “benefits” to sellers from the new rule over where things stand today however, there is only limited negative impact on sellers as a result of the new rules. The reason I say there are no additional benefits to the seller that is because instead of opening up more marketing and promotion opportunities to the seller, or the listing agent it puts more restrictions on what the listing agent can do. The new rules, to some extent you could say, dictate to the listing agent how they will market and promote the listing. One might ask, but wouldn’t the seller want their home in the MLS, isn’t that part of the reason they listed it with a REALTOR®? The short answer is yes, for most sellers, if their listing is not entered into the MLS at some point prior to accepting an offer, they are likely leaving money on the table.
However, having said that, the timing of when to put it in the MLS can be critical and, if a listing agent is forced to put the listing in the MLS too early, or prevented from doing any marketing or promotion of it beforehand, it can also result in the seller leaving money on the table. The reason for this is the new rules limit how long a listing may stay in “coming soon” status to 21 days. While 21 days is long enough in many instances for a seller to prepare their home for the market, often times it is not. In addition, it is common for a listing agent to get a property listed in advance of when, for timing reasons, the seller is really ready to sell. A lot of very good listing agents use this period to market the home and create interest in it in advance of it actually being available for showings and sale. This type of marketing, especially in this low-inventory market, works very well and often results in drawing literally a house full of people to the listing once it is finally on the market and available for showings. It is common for the result to be multiple offers, oftentimes over the asking price, which, while maybe it’s not great for buyers, it’s great for sellers! So, many agents feel (including me) that restricting marketing of a listing in advance of when it is actually available for showings and sale is not in the sellers best interest.
Let not your hearts be troubled though sellers! There are firms out there, such as mine, MORE, REALTORS® that embrace change and see things such as this as yet another opportunity to set ourselves apart from the other real estate companies out there. To do so, we use our unique digital marketing skills, along with our experience in the industry, to maximize the marketing for our sellers to make sure we are doing everything possible to make sure our sellers get the best price and terms for their home while still staying within the rules we have to abide by. (Ok, shameless self-promotion, but hey, I need a little something for all this hard work, right?)
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