SAN FRANCISCO — The board of directors of the National Association of Realtors has overwhelmingly passed a controversial policy proposal designed to combat pocket listings.
In a 729-70 vote, the trade group’s 800-member board on Monday morning voted to approve the Clear Cooperation Policy, which will require listing brokers to submit a listing to the multiple listing service within one business day of marketing a property to the public.
As a result, the rule will effectively end the growing practice of publicizing listings for days or weeks without making it universally available to other agents.
Directors’ votes are anonymous and it is not clear if there were any abstentions. But before the vote, 13 directors discussed the policy on the floor, nine of them in favor of the motion. The vote results, shown on a giant screen in a ballroom of the Marriott Marquis San Francisco, prompted big cheers and applause.
The Council of Multiple Listing Services (CMLS), which supported the policy, commended NAR’s board for its decision and indicated it stands ready to help MLSs put the new rule into practice.
“Together we made sure that cooperation remains the heart of organized real estate,” the trade group said in an emailed statement. “CMLS is proud to support the industry by providing MLSs the information and tools necessary to meet their local market needs and implement this policy effectively.”
The policy will be effective January 1, 2020 with a May 1, 2020 implementation deadline in order to give MLSs time to make any technology changes and to educate their agent and broker subscribers on the new policy.
The policy reads:
MLS Statement 8.0
Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is 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.
Chicago area-based MLS Midwest Real Estate Data (MRED) and Bright MLS publicly backed the policy proposal. In Bright MLS’s case, it adopted the proposal as a rule last month. Brokerages Compass and Assist-2-Sell, however, strenuously objected to Bright MLS’s policy.
The Austin Board of Realtors (ABoR) MLS came out against NAR’s proposed policy. Some agents also pushed back against the proposal, though other industry leaders, perhaps most notably Redfin CEO Glenn Kelman, came out in support.
Before the vote, NAR directors speaking in favor of the policy emphasized that putting listings in the MLS benefits both sellers and buyers by offering properties maximum exposure.
A director from the Greater Baltimore Board of Realtors said that it was “extraordinarily frustrating” for consumers to not give them access to all available properties, which she said has encouraged some buyers to “back out of the process” and additionally “makes us as buyer representatives not look so great.”
She added that she doesn’t see how a listing agent or broker who does not put a property on the MLS can honestly say they are doing their fiduciary duty for the seller.
Director Liz Harris noted that “it is not cooperative or legal” to place homes in a private listing network and not in the MLS — as some brokers and agents do — in order to not expose it to people of color, in violation of fair housing laws.
Judie Parks, a NAR director from the Greater Louisville Association of Realtors, told her fellow directors that her mother, who had been in real estate for some 40 years, used to tell her stories about when she started in the business and all the men had pocket listings they wouldn’t share.
“The reality is that this [today’s pocket listings] is just a different form of discrimination,” she said, to some some applause.
“Not only is it not pro-consumer, it is not pro-Realtor! It is not who we are,” she added, to even more applause.
Perhaps in response to detractors such as Compass, Director Cindy Ariosa, vice chair of the Multiple Listing Issues and Policies Committee that brought forth the proposal, stressed that the policy had “the support of the brokerage community,” including The Realty Alliance, a network of dozens of the nation’s largest brokerages. Compass did not respond to an emailed request for comment for this story.
A director who spoke against the proposal said she appreciated “what the policy is trying to do” but that she thought it needed more discussion because it “stifles other avenues of marketing that might be a better fit” for consumer needs.
But a director from the Minnesota Association of Realtors pointed out that the policy “doesn’t prohibit you from doing anything,” including using any marketing channels. Rather, the policy adds the MLS as a marketing channel, he said.
Another director who opposed the policy said NAR had “never before” defined an office exclusive — which is allowed under the policy and means the listing will only be marketed within a brokerage due to a seller’s privacy concerns — as a listing that cannot be marketed to the public.
She said the policy could bring up antitrust issues because it “may be restraining a business practice that is perfectly legal” and may also serve to drive members away from the MLS.
But another director said, “I don’t see [the policy] as taking away anything from people wanting to be anonymous. It just says … that if you market it to the public, it is no longer anonymous.”
Editor’s note: This story has been updated with comments from the board meeting and CMLS.
Email Andrea V. Brambila.
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