Now that practice in the Washington area may be coming to an end.
Bright MLS, the region’s multiple listing service, on Wednesday announced a policy that requires all real estate agents and brokers in its system to submit the listing within one business day of marketing the property to the public. The policy is in effect now, but fines won’t be imposed on agents who break the rule until Dec. 1. The fines for noncompliance are $5,000 for the first infraction, $7,500 for the second and $10,000 for the third instance.
“This is a pro-competition, pro-consumer policy that addresses the issue of some brokerages putting all their listings as ‘office exclusives’ and not listing them on the MLS while continuing to belong to the MLS and searching for listings shared by other agents,” said Jon Coile, chairman of Bright MLS. “That’s like coming to a potluck dinner with just a fork. It’s counter to the spirit of the MLS, which is based on the idea that all agents will share their listings, cooperate with other agents and get compensated accordingly.”
Robert Hryniewicki, a real estate agent with HRL Partners at Washington Fine Properties in the District, applauded the decision.
“Technology should make everything transparent, which helps real estate agents and consumers,” Hryniewicki said. “It can be very cumbersome to try to get information about pocket listings that a buyer asks about after seeing a sign or an email about a property.”
“Private exclusive listings, where the sellers want privacy related to the sale or because the sellers think it will sell in a more targeted way, has been a gray area in our business for a long time,” said Corey Burr, a senior vice president with TTR Sotheby’s International Realty in Chevy Chase, Md. “The overall goal of this new policy to make listings more public is good for the real estate community and good for consumers, and it’s what our business should be about: providing better information for consumers.”
However, not all real estate agents are on board with Bright’s policy.
“Bright’s new policy means that brokerages who have seller clients who don’t want their property in the MLS will not be able to put a sign on that property and will not be able to market that property to other brokerages,” said Holly Worthington, principal broker of Compass in Chevy Chase, Md. “This new rule reduces cooperation between brokerages for these listings.”
Worthington said many brokerages post non-MLS listings on their websites for anyone to see and buy, with a commission paid to the buyer’s agent. She said some property owners want to try out an “aspirational asking price” without having their property on the MLS, which tracks the number of days a home is on the market. Listings that have been on the market for longer than normal often appear less appealing to buyers and will probably garner a lower offer, so keeping a property off the MLS allows sellers to hide how long their property has been on the market.
Consumer impact of Bright policy
The new policy will level the playing field for everyone, supporters said.
“If a seller is Tom Cruise and doesn’t want anyone to know that his house is for sale, that is a legitimate use of a private listing,” Coile said. “But agents can’t then go around advertising the property through email blasts and on other websites and just keep it off the MLS. They can’t broadcast it to the world but exclude the MLS.”
Agents will be allowed to submit a waiver when sellers request their property be kept off the MLS, said Coile, but in return, agents will only be able to market that property one-on-one to another agent or to an individual buyer.
Burr said there may be a few things to be ironed out with Bright’s new policy, but that it’s headed in the right direction.
“This is a welcome intervention by Bright MLS that is in the best interest of the consumer,” said Morgan Knull, an associate broker with Re/Max Gateway in the D.C. region. “By definition, marketing is not supposed to be discreet. Sellers always benefit from maximal exposure of their property, and buyers benefit from the confidence that available inventory isn’t being concealed in the shadows. Unfortunately, this new policy fails to address the egregious abuse of ‘Coming Soon’ listings in Bright, Zillow and some brokerage websites, which have become a backdoor way to preselling inventory.”
“Coming Soon” listings, which agents can continue to put on Bright MLS, are properties not ready for marketing but that sellers and their agents want buyers to know will be available in a few days or weeks.
The National Association of Realtors is also preparing a rule that members will vote on in November, said Coile, which is similar to Bright’s rule but requires listings to be placed on the local MLS within 24 hours rather than one business day.
Worthington said she anticipates pushback from agents and brokerages on Bright’s new policy.