REALTORS® Association Considers New Rule Requiring All Listings Be In MLS

The MLS Technology and Emerging Issues Advisory Board, of the National Association of REALTORS® (NAR), proposed a rule change that is sparking some controversy among its’ members.  The proposed “Clear Cooperation Policy” requires that all listings be put in the MLS within 24 hours of “marketing a property to the public“.  The policy defines “public marketing” as including, but not limited to, “flyers displayed in windows, yard signs, digital marketing on public-facing websites, brokerage website displays (including IDX and VOW), digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public”.

But, isn’t that how it is now?

Many consumers may having been thinking that this is how it was all along, that new listings were required to go into the MLS but, that is not currently the case.  Presently (and going back to the beginning of the MLS here in St Louis, I believe), agents have been able to determine the best marketing methods for their client, as well as allow their client input as to whether they wanted their listing in the MLS immediately, after a period of time or even not at all.

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“MLS Exempt” Listings – Is This Approach Good For Sellers Or Just Listing Agents?

Something that has become fairly common today in the St Louis real estate market are “MLS exempt” (or “non-MLS”) listings. Also known in the industry as “Pocket Listings“, this refers to a home that is listed with an agent but is not entered into the MLS.  When I first enteered the real estate business, back in 1979, these type of listings were known as “Vest Pocket LIstings” with the reason being the agent would instead of turning the listing agreement into his or her office, making everyone aware of it, would keep the listing in their vest pocket so they would be the only one aware the home was for sale.  At that time, from my vantage point, the only reason I saw for vest pocket listings was so the listing agent could “double dip”, meaning sell it themselves to a buyer without the involvement of a buyers agent, thus getting to keep all the commission themselves.

Before I go further, let me give a quick lesson on how real estate commissions work.  Almost always, the seller, in the listing agreement, has agreed to pay a percentage of the sales price of their home as commission.  This commission is split in some fashion between the listing agent and the selling (buyers) agent.  In fact, a requirement of the MLS is that all listings that are entered by listing agents must offer compensation to the selling (buyers) agent.  However, if the buyer is not represented by a buyers agent and works with the listing agent directly (which is a bad idea, see for why) then the listing agent keeps all the commission.

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