A look at MLSs and the pocket listing ban

Alcynna Lloyd: Hello, HousingWire listeners. Today, I’m joined with Ryan Cook, the owner of HomeSmart affiliated brokerage in Plymouth, Massachusetts. Thanks for joining us on HousingWire Daily, Ryan.

Ryan Cook: Good morning.

Alcynna Lloyd: Of course. Well, listeners, Ryan, has joined us to discuss a recent “HW+” article he was featured in as a source. The article, which was written by HousingWire real estate editor and the host of HWD’s “Houses in Motion,” Matthew Blake discusses the policing of pocket listings. Ryan, the article is a part of a two-part series that examine the ramifications of the National Association of Realtors’ 2020 decision to ban pocket listings. But before we dive in the article, I want to take us back to last year. When the ban was announced, what were your initial thoughts?

Ryan Cook: I laughed.

Alcynna Lloyd: Okay.

Ryan Cook: And the reason being is I’m a big proponent in property owners’ rights and really what it comes down to is if…it all comes down to disclosure. If people are disclosing everything that goes on. Like that the challenge with pocket listings, it’s policing them. How do you police them? How do you enforce it? And it really requires the agent community to police it. And quite frankly, most agents don’t want to police it because they don’t want things turned on them at some point because everybody makes mistakes at some point and they don’t want someone holding a grudge. And next thing you know, they’re in trouble with the board or the MLS so people tend to look the other way. So the challenge there is how is it enforced? But I laughed because it’s not enforceable. It may not be in the client’s best interest in the end. The client’s best interest if you inform them of their rights and have full disclosure, the client’s best interest is up to the client.

Alcynna Lloyd: Yeah.

Ryan Cook: My opinion.

Alcynna Lloyd: So this is about regulation it sounds like?

Ryan Cook: It’s all about… Well, it’s about regulation. It is about MLS’s protecting their data sources. Because I mean, there has been an assault on the sources of data and the freeing of data to the general public. While I certainly don’t think going back to the time of real estate listings being in a book and having to go down to the realtor association every other week to pick up the book is the right way to go, there needs to be information shared openly with the public for sure. This is more, in my opinion, protection of data.

Alcynna Lloyd: All right. Well, so now let’s discuss the series I mentioned earlier. Part 1 looked at the history of the ban and the enforcement problems it posed. And Part 2 examines how MLSs have implemented the measure so far, and legal challenges to banning it essentially. You were featured in Part 2, which dives into the ban’s complication. So, Ryan, have you implemented the measures into your business and what challenges have you faced so far? You kind of mentioned why you think regulation is such an issue. So I’m interested to seeing how that applies to your business.

Ryan Cook: So, within my business, so, you know, I have over 40 agents in my office right now, and my big thing is just disclosure. Disclosure, disclosure, disclosure. We are members of NAR so we certainly need to follow the guidance of our local board. My main MLS, MLS PIN is not owned and operated by a realtor board. It is independently owned and works in congruence with local boards in the area. So, it’s a little bit different, but for me, it’s just with agents, disclosure, disclosure, disclosure. I mean, quite frankly, pocket listings, I think it’s like the Bogeyman. There really isn’t much in the way of pocket listings going on. Do you have the occasional agent who puts a message out to, you know, their own list that they’ve cultivated of potential buyers or client list and, you know, maybe before it comes on, they blast out a message that, “Hey, you know, I’m gonna be putting this listing on, you know, in the next week, if you’re interested, let me know and I’ll get you in there early?” Yeah, of course, that goes on. Is that considered a pocket listing? I don’t think so.

But in the end, I don’t understand how the board is there to determine what is right for the consumer. If I think it would be better implemented if the board came out with the disclosure so that if someone wants to do a pocket listing the agent…similar to an agency disclosure. Why wouldn’t they be required to just have some sort of disclosure about you know, listing their property or broadcasting the property to their own list for a certain period of time? The pluses and minuses of that, and then allowing the consumer to make a decision on their own.

Alcynna Lloyd: Okay, well, so, okay. Now I wanna switch angles a little bit and I wanna focus on something that was mentioned in the article. According to the article, as the owner of your own HomeSmart affiliated brokerage, there are a few MLS bills you have to pay. One of these fees is paid to MLS PIN, which is one of the largest realtor-owned multiple listing services in the nation. So how does working with an MLS impact your business and its procedures? You mentioned how you think it’s up to a client’s disclosure on how they feel about pocket listings, but when working with MLS PIN, how does that impact what’s going on with your procedures?

Ryan Cook: Sure, great question. I mean, part of the… Again, it comes down to the individual brokerage and what their individual rules are and how they’re enforced. So, I’m a member in three different MLSs. So MLS PIN is my main. I just said it’s one of the largest realtor and multiple listing services in the nation. We have a very high density of agents in Massachusetts, especially in the greater Boston area. And it covers basically from the Cape Cod Canal up to Cape Ann on the North Shore, and all the way out to the edge of Springfield. So it covers a massive area within Massachusetts, highly densely populated areas. You can’t be in business unless you’re in the MLS. And it’s not like I have a choice of MLS providers. So, how does working with MLS impact the business and its procedures? It impacts everything.

If they come out with a standard where you like, for example, most MLSs have a rule that within 24 hours of signing a listing contract, the property needs to be listed on the multiple listing service. What if the client doesn’t want it on there yet? What if they want a couple of weeks to prepare? Do you not sign the contract? Do you postdate the contract? A lot of MLSs will have a form about delayed entry or delayed listing. So whatever their policies and procedures are, it is my job as the broker to make sure that it’s implemented because if it’s not, and they find out, and they come after you, well, they can shut your whole office down. And it doesn’t just make the office like… It makes business stop is what it does. Because then the agents can’t operate. If I get shut down as the broker, every agent under me get shut down.

So, it can be a real hammer. If you do something wrong, they’re fairly lenient. MLS PIN is actually pretty easy to work with. I don’t have any issues with them. They’re not as stringent on enforcement of certain things as Rhode Island Statewide, which is owned by the Rhode Island Association of REALTORS, Cape Cod & the Islands, which is owned by Cape & Islands Association. You know, they’re a bit more strict, but they offer different levels of service. So, really depends on the MLS you’re working with, what rules they have, and how they implement enforcement of those rules.

Alcynna Lloyd: So I wanna continue touching on this because in the article you contend, which you kind of mentioned in the last answer, MLS PIN which is not owned by a NAR chapter, but with its own listing requirement does not police the pocket listing ban. In fact, in the article you say, it’s not being enforced if someone has to report it. And even if they report something, everyone looks the other way. So can you dive deeper on this? You kind of touched on it briefly in our last question, but why do you think MLS PIN and other listing services have trouble policing the ban? Do you think it’s an issue that’s up to the discretion of the individual, a person looking into pocket listings?

Ryan Cook: And I did touch on this earlier, the challenge is, MLS PIN, like any MLS, their staff is only so large, right?

Alcynna Lloyd: Yeah.

Ryan Cook: And how do they go about policing it? So the way it used to work is in order to put a property on the multiple listing service, you had to submit your paperwork by fax through the multiple listing service and then they put it up. And then when obviously everything started moving towards the internet, they provided their web-based interface to be able to put it up there. So they don’t know about it, and you don’t actually send them any contracts. It is basically part of the agreement of being a member of the multiple listing service that you need to be doing things the right way. So they really have no way of knowing unless agents report it. And as I stated earlier, most agents are very good and do the right thing.

It’s on rare occasion something goes wrong, and they tend to look the other way because they just don’t want problems. You never know if you’re gonna run to a person who is having a bad day and next thing you know they’re making your life miserable. So, most agents will give other agents the benefit of the doubt, professional courtesy, and may say something to you personally and say, “Hey, you know, you need to get that up there.” But if someone’s aggravated and they call in, next thing you know you get a fine. So the challenge there is policing it. MLS doesn’t have enough staff to police it. You’re not submitting your contracts to the MLS in order to get approval to put the listing up there. It’s an on-your-honor system. And most agents want to do the right thing, realize sometimes people make mistakes or having a bad day, so they don’t want to nail someone to the wall because one day they might be the one having a bad day.

Alcynna Lloyd: We know that just as MLS ownership and structure varies so does enforcement among MLSs. In the article, you suggest it all comes down to leadership of the MLS and what they want to uphold. So, also highlighted that MLSs that do work directly with NAR are more likely to be compliant. So, why do you believe this?

Ryan Cook: So, I can only go off of my experience working with different multiple listing services. Like I said, the Eastern half of Massachusetts MLS PIN, it is not owned by a local realtor board. It is a service contracted out to, you know, MLS Pinergy. A little bit different where in Rhode Island, where I do quite a bit of business as well, their local association owns it and they police it very strictly, very strictly. They also offer a lot more training through things. Same thing with Cape Cod & the Islands, they do a lot more training. And I think it is because it is owned by the realtor association. They have members that they need to provide a level of service for. In Massachusetts, that’s not the case. I mean, realtor members just get charged a different price than non-realtor members. And in the end, it’s just a service as part of joining, you know, being in Rhode Island and being on the board, which you have to be on. It’s just a different requirement, different level of service because, you know, they’re looking at it as, you know, these our members, our realtor members, where MLS PIN, not really, we’re subscribers.

Alcynna Lloyd: All right. So, you’ve answered a lot of the questions about why MLSs need to either pay attention to these pocket listings or why they’re not enforceable based on regulation. So, before we wrap today, is there anything else our audience needs to know about pocket listings, the ban, or MLSs in general?

Ryan Cook: Honestly, it’s just a matter of having a conversation on the consumer side. Having a conversation with your agent. And an honest conversation, what are the pluses? What are the minuses? Everybody’s individual needs are different. Some of the folks interviewed in the article out in the West Coast who were doing very, you know, ultra-high-end listings, they crave the privacy. They don’t want to have their listing on the multiple listing service and everybody seeing their business. They want the privacy. So if the consumer wants that privacy, why should they be forced to broadcast their listing on the multiple listing service removing their privacy wishes? Have those conversations with your agents. What are the pluses? What are the minuses? What are you getting for it? In the end, is the agent able to perform and get your home in front of people who are able to purchase your home and close? That should be the biggest question that anybody answers.

Alcynna Lloyd: Well, I’m sure we’re gonna have a lot of answers from a lot of the people listening in on this and having differing opinions, or that may just want to add to the conversation itself. So, Ryan, I wanna thank you so much for joining us today.

Ryan Cook: Thanks for the opportunity, Alcynna. That was a great time.

Alcynna Lloyd: Of course, listeners, if you are interested in “HW+” and reading this exclusive premium coverage, head over to housingwire.com and sign up now. Thanks for listening. Bye.