National Association Of Realtors Bans Pocket Listings
The National Association of Realtors has officially banned the use of pocket listings. The NAR board of directors voted 729-70 on Monday to ban the controversial practice. The NAR stated the practice was controversial because it allowed agents to select who the property is sold to.
Pocket listings were surging in competitive markets in overpriced markets like New York, San Francisco, Los Angeles and Washington D.C.
A listing agent to use the MLS service to let select realtors know the property was for sale. Realtors would usually list it with code words or with an informal “coming soon” notice. This also allowed them to avoid officially sharing the listing and often retaining a full commission.
San Francisco market has seen a surge of pocket listings in the past decade. Homes selling via pocket listings increased by 68% between 2010 and 2018. Redfin CEO Glenn Kelman supports the ban and says the trend had been on the rise across the country:
The new NAR rule requires properties to be listed on the MLS within one business day. The policy states that the listing broker must give equal access to all MLS participants. The NAR states that public marketing includes but is not limited to yard signs and digital marketing on public-facing websites. The NAR also says public marketing includes brokerage website displays and digital communications marketing (email blasts).
The policy becomes effective on Jan. 1, 2020. However, the NAR directors delayed enforcement until May 1, 2020. The NAR says this is to give the nation’s more than 800 multiple listing services time to make any technology changes and educate users.