SCOTTSDALE, Ariz. — What’s the fate of multiple listing services, if nearly half of all homes sold last year were never listed in an MLS or were listed only after a buyer had already been lined up?

That’s the question facing MLS executives, following the presentation at an industry conference of a study by Jonathan Green of real estate information and technology provider CoreLogic.

“Normal is there’s no more normal,” Green, CoreLogic’s vice president of real estate services, told attendees of Clareity’s MLS Workshop on Friday.

Last year, a study by Sunnyvale, Calif.-based MLSListings Inc. concluded that “pocket listings” represented 26 percent of total home sales in some Northern California markets during the first quarter of 2013, up from 15 percent in 2012.

CoreLogic’s more recent analysis compared public record transaction data with MLS data in four counties. Although Green did not identify the counties by name, he said that together they represent about 4 percent of U.S. parcels.

While public records show 266,804 homes changed hands in those counties in 2013, MLSs reported only 174,762 transactions, or 66 percent of the total.

CoreLogic also found that 9 percent of homes sold in those four counties during the study period were already under contract when submitted to the MLS or were under contract within three days —  the implication being that if they sold that quickly, it’s likely they were “premarketed” before submission to the MLS. Seven percent of the listings were under contract in zero to two days after making it onto the MLS.

Add the share of off-MLS transactions (34 percent) to pre-MLS transactions (9 percent) and it appears that 43 percent of 2013 transactions in the four counties took place either outside of the MLS or with little or no MLS exposure, Green said.

Those are “eye-opening numbers,” tweeted workshop attendee Bob Hale, president and CEO of the Houston Association of Realtors, of the growth in pocket listings — sales also referred to as whisper listings, off-market listings or off-MLS listings.

The difference in sales volume by dollar was smaller: Public records showed homes valued at $95.7 million changing hands in 2013 in the four counties studied, and MLSs appear to have handled 75 percent of that business, or $71.3 million in sales.

But regardless of whether total home sales or sales volume by dollar were analyzed, there was a definite trend.

In 2012, there were 11 percent more sales tallied in public records than by MLSs, and 22 percent more sales volume. In 2011, there were 9 percent more sales recorded in public records than by MLSs, and a 10 percent difference in sales volume.

Put another way, public records showed home sales up 17.3 percent in 2012 and 47.8 percent in 2013. Sales handled through the MLS were up by 15.2 percent in 2012 and 8.5 percent in 2013.

So while the market has definitely been improving, MLSs captured an increasingly smaller share of that improvement.

This data comes with one major caveat: CoreLogic did not make any attempt to differentiate between off-MLS listings and traditional for-sale-by-owner transactions in its analysis. Therefore, there may or may not be something happening with FSBOs that may account for some of this difference, Green said.

Green defined the “pre-MLS” market as the legal period for a broker to withhold a listing before MLS submission. Typically, MLS members must enter listings in the MLS within a certain period after a listing agreement is signed, often two or three days, though even five days is not unheard of.

“During that period a broker could advertise and close a transaction with no obligation to co-broke,” Green said.

Of the listings sold in zero to three days, 36 percent were sold within the same office, and of those selling within two days, 39 percent were in-house sales. That bolsters the theory that at least some off-MLS activity is due to brokers’ and agents’ desire to double-end deals and thereby collect both sides of a commission.

“The pre-MLS market has real financial teeth, real impact, real meaning,” Green said, estimating that, with each 1 percent increase in transactions involving pre-MLS marketing, brokers stand to gain $250 million in 2014 gross commission income nationally from in-house sales.

Off-MLS marketing comes with an even bigger price tag: Each 1 percent change represents an estimated $8.7 billion in 2014 transaction volume.

“That’s a tremendous swing,” Green said.

At the end of his presentation, Green posed five questions for MLS execs to ponder:

  • Will the prevalence of off-MLS listings (or FSBOs) continue to grow?
  • Will behavior change in proportion to inventory?
  • Will brokers attempt to systematically or effectively monetize pre-MLS listings?
  • Will this behavior dilute the “first position” status of the MLS as a marketing engine?
  • Will this behavior change the perception of the MLS as the record of choice for listing and sales content?

He also made a practical observation: The waiting period before a listing is submitted into the MLS was originally put in place to accommodate paperwork demands before MLSs were electronic.

“Is this two- or three-day waiting period an anachronism?” he asked.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription