The National Association of Realtors board of directors voted 729-70 on Monday to ban the controversial practice of “pocket listings.”
It’s a practice that was surging in competitive markets such as New York, San Francisco, Los Angeles and Washington D.C. It allowed a listing agent to use a multiple listing service to let others know the property was for sale, usually with an informal “coming soon” notice, while not officially sharing the listing and often retaining a full commission.
In San Francisco, where NAR’s annual convention kicked off last week, the share of homes selling via pocket listings increased 68% between 2010 and 2018, and the trend had been on the rise across the country, according to Redfin CEO Glenn Kelman.
“We know that the policy is a crucial protection for consumers,” said Kelman, who supported the NAR decision, “especially members of minority groups who, research shows, are often the last to find out about pocket listings.”
The new NAR rule requires properties to be listed on the MLS within one business day of being marketed to the public. Specifically, the policy states:
“Within one 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, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and applications available to the general public.”
While the policy becomes effective on Jan. 1, NAR directors delayed implementation until May 1, 2020, to give the nation’s more than 800 multiple listing services time to make any technology changes and educate users.