Major East Coast multiple listing service Bright MLS announced Wednesday that it has rolled out a new policy on so-called “pocket listings,” requiring agents to add any properties they are publicly advertising to the system or, eventually, face steep fines.
The new policy gives members of Bright MLS, which has about 95,000 members in the Mid-Atlantic region, a day to post their listings “following consumer marketing of any kind,” according to a statement from the trade group. Marketing is defined as everything from flyers to yard signs to digital marketing on public websites to emails and more.
The new policy goes into effect today, though Bright MLS won’t start fining agents for violations until Dec. 1. After that time, the penalty for breaking the rule is a steep $5,000.
However, Bright MLS president and CEO Brian Donnellan told Inman that there is also an appeals process built into the policy “because we know that not everybody does this on purpose.”
The new policy comes amid growing concern in the real estate industry over listings that remain off-market for either part or all of their lifespan. Such properties are sometimes referred to as “pocket listings” and in many cases eventually go public after an initial period of exclusivity. But they have nevertheless sparked an ongoing debate about competition and transparency within the industry.
The most significant recent development in that debate came earlier this month, when the National Association of Realtors announced that it was considering a new policy that would require agents to share their listings with other members of their multiple listing services (MLSs). The Clear Cooperation Policy, as the rule has been dubbed, hasn’t yet been officially adopted and continues to allow some popular marketing tactics such as “coming soon” statuses and office exclusives that are only shared internally at a brokerage. But aside from those scenarios, it would also effectively ban off-market listings in many instances.
Jon Coile, chairman of Bright MLS’s board of directors, told Inman that his organization essentially adopted NAR’s policy with minor edits. Bright MLS leaders had been working on their own policy prior to learning about NAR’s work on the issue, but ultimately liked what the national trade organization came up with.
“It was kind of great minds think alike,” Coile explained.
Coile also described the problem of off-market listings as “gaining momentum” of late, saying that some agents abused the practice of having office exclusives or private listings. The issue, he explained, was that an agent might claim a listing was private, but then market it widely to the public across various mediums.
“The office exclusive is supposed to be private,” he said. “So if you’re putting it on the big portals and you’re advertising, that’s not really a private listing.”
Bright MLS’s new policy still allows for office exclusives and private listings, they just have to actually remain private.
“The only restriction is you can’t market it to the public,” Coile added.
The new policy also still allows agents to mark a property as “coming soon.”
Coile ultimately concluded that the new policy is “very pro-consumer” and “pro-competition.”
Donnellan said that Bright MLS has technology that scans for off-market listings with public marketing, but also will rely on word of mouth from members of the industry to identify violations of the new rule. The next 45 days — before fines start kicking in — will be used to educate members of the MLS, but Donnellan ultimately expressed optimism that the policy will actually benefit everyone.
“We believe this is totally a pro-consumer direction to go,” he said. “And it also happens to be pro-real estate, pro-broker and pro-agent. We feel like this is a total win win.”