REINCheck

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VO [00:00:06] You're listening to REINCheck with Andrea Rice, Contracts and Industry Specialist at REIN, where you get the latest member news and information delivered straight from the source, REIN MLS.

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Andrea Rice [00:00:20] Hello and welcome to REINCheck. I am your host, Andrea Rice, and today we are checking in with REIN's Sales Manager Advisory Committee member Becky Claggett and REIN's Member Services Senior Manager Nancy May to talk about pocket listings and coming soon listings. What are they and why are they not allowed? Becky and Nancy, thank you so much for taking time out of your busy schedules to be here today.

Becky Claggett [00:00:45] Thank you for having me.

Nancy May [00:00:46] Yes, pleasure to be here.

Andrea Rice [00:00:48] And Becky, I think this is your fourth time now on the podcast and that makes you the most regular guests we've had to date. So, I really want to highlight that and thank you again for all of your contribution to REINCheck.

Becky Claggett [00:01:01] Happy to do it.

Andrea Rice [00:01:03] All right, so let's go ahead and talk a little bit about pocket listings. REIN does not allow what we call pocket listings, which are listings that are not listed in the MLS but are being marketed to potential buyers. And REIN's listing department actually monitors and has checks in place to prevent pocket listings. Nancy, what are some of the things that REIN does to prevent pocket listings?

Nancy May [00:01:26] Well, actually, they're REIN has several rules in place to help prevent pocket listings. First of all, in the state of Virginia, a broker must have a written, signed listing agreement with a seller in order to market that property for sale. And if a broker has a signed listing agreement, then REIN's rules specifically the three point one point one exclusive listings states that all listings are required to be input into REIN's system no later than the next business day from the list date on the listing agreement. So, any listing not input into the MLS by the next business day requirement is considered a pocket listing, which is rule four point one point nine. And the property may not be marketed or shown prior to that first day of the listings term a.k.a. list date. And finally, as part of REIN's responsibility to promote cooperation among members, rule four point one point four, which is availability to show, allows for all REIN members to show a REIN listing and rule four point one point seven limited showing instructions further clarifies that once a listing is input into the MLS, it must be available for showings as of that list date. You can't do things like do not show until this or add excessive restrictions to showings.

Andrea Rice [00:02:46] Ok, so it sounds like REIN has a lot of rules in place, a lot of procedures to help prevent pocket listings. But why? What is the real-world impact of pocket listings on agents and consumers?

Becky Claggett [00:03:01] I'll speak to that. Pocket listings really do a disservice to the seller. For one thing, it limits how many people are exposed to the sellers and product, and it doesn't allow every buyer the chance to be exposed to the listing. Pocket listings, by definition, are exclusionary, so fair housing becomes a concern with the use of a pocket listing. Pocket listings can also lead to inaccurate and delayed statistical information, which in turn impacts valuations. Interesting, though, is the fact the name pocket listing itself is a historic term. The term dates back to when listings were scribbled on note cards that agents held literally in their pocket. So that's where the name comes from. The MLS changed things when they came into existence in the early 1900s, so the real thing is the pocket listings limit the exposure to the property.

Nancy May [00:03:58] And if I could add a little bit on that before MLS existed, every listing was a pocket listing. Brokers only had access to their listings, and buyers had to go from broker to broker to broker in order to be able to see everything that was out there. MLS has brought competitors together under a single centralized database of properties for the greater good of the industry, and it's a cornerstone of what makes our industry work for everyone today. If all brokers are following the rules and sharing their listings, but one firm or agent is holding listings back and only offering to their sphere of influence this goes against everything that cooperation stands for. And so therefore our rules are really in place to help create a level playing field for all brokers, with everyone having access to the same information.

Andrea Rice [00:04:46] That's really interesting and a lot of good historical information there. And you know what pocket listings are, how they came. You know how at one time everything was really a pocket listing, right? But it's not in the spirit of cooperation. And Becky, I didn't even think about the fair housing concern with pocket listings. So that's another good point there. I feel like I've just learned a whole lot more about pocket listings. So now that we have a good understanding of pocket listings, let's move on to coming soon. By definition, coming soon listings are listings that may or may not appear in the MLS but are not available for showing or purchase for a designated period of time. And I wanted to talk about coming soon listings because REIN, from time to time, will get requests from members asking for REIN to allow coming soon listings. And when we get those requests, they are reviewed by committees and the board, but coming soon listings would, by nature, go against some of those pocket listing rules and guidelines that you mentioned earlier, Nancy and Becky, and would really degrade cooperation among members.

Nancy May [00:05:57] That's right, Andrea. And while some MLSs do have a coming soon status, REIN does not. At its core, a coming soon listing is a pocket listing, which is we've already kind of gone over the reasons why those aren't good. Essentially, REIN’s primary stance has been either a listing is available to be marketed or it's not. And if you have a listing agreement, then it needs to be in the MLS. And REIN just doesn't allow marketing of a listing before that list date. And that includes promotions on social media, signs in the front yard, anything like that.

Andrea Rice [00:06:30] Right and back to your point, you did mention that, you know, some MLSs do allow coming soon listings. REIN, however, does not. I have heard that some of the MLSs that have allowed coming soon listings have had, from time to time, some negative feedback associated with allowing coming soon. Becky, have you heard that as well or have you had any experience with coming soon listings?

Becky Claggett [00:06:55] Absolutely. I mean, the general consensus among brokers that I know in other MLSs is that coming soon is just a hot mess. I mean, that's the general consensus. Coming soon as an MLS allows it is typically listed in the MLS but purposefully kept out of any data feeds that go to the consumer. Therefore, it's also going to be out of any data feeds that agents might use for apps, apps that they pick up to look at properties rather than going to the native MLS, so to speak. One MLS might have a coming soon status that does not accumulate days on a market, and another might have a in an MLS that it doesn't accumulate days in the market, so it messes up data and therefore messes up all of the CMA statistics that we're taking a look at to make decisions. I was in Texas a while back and rode through some neighborhoods. They have coming soon there, and there were four coming soon signs on one street. And I was just curious if they weren't listed yet, how that works in the seller's favor or even the listing agents favor that they don't get that impact of a new listing on the market because some of their impact has been taken away. And a buyer. Do they have to ride by the sign to see it because they can't access the information because I tried to access it on a buyer app? And so just kind of interesting. Who is it? What's the purpose here? Some of the comments from other brokers that have coming soon. One broker said a property should either be off the market and not available for public sale or on the market and available for anyone to purchase. An in-between status creates exclusivity, which is not in the interest of equality of opportunity to purchase, which is public policy of long standing. Another broker said, coming soon is a recipe for a lawsuit. When a seller finds out they could have gotten significantly more money on an open market than they did. Can't wait to see that before a judge. A third one said, the coming soon status was designed to help consumers by making sure listings are advertised to a wider brokerage community and not just internally to the brokers smaller pool of agents an agent’s pool of clients. But it does not work out that way. Nothing compares to the entire MLS. The MLS is just that. It's a system to put your listings on the market and share it with every member of the MLS that provides maximum exposure. If it's not ready for market yet, then wait and put it on when it's ready. The question being, is it for sale or is it not for sale? It's not for sale. Why are you wanting to market it? I think the second thing is that Nancy talked about a little bit is often we'll see in some place an agent feels safe, like a Facebook group of agents. And they'll say, hey, I'm going to list this property next week. And understanding that that is truly a coming soon comment, which would lead to a pocket listing and a violation. Even that because that's marketing. Its marketing to a small group of people and not giving it to the opportunity to go to a larger group of people such as our entire MLS.

Andrea Rice [00:09:59] Yeah, Becky, a lot of good information there. A lot of good points. I didn't even think about the implication of skewing the data depending on do you count those days on market if in an MLS that allows coming soon. So, and I think what is so important to remember and just hammering home this point is that the MLS is a cooperative among agents to share with each other and to benefit the consumer and pocket listings and coming soon listings just don't allow for that true cooperation. So, yeah, a lot of good information there, and I think that really will help some of the people that do inquire about why we don't allow coming soon or pocket listings, you know, really the thought process behind it and why we don't and the implications of these types of listings. Nancy, Becky before we sign off, is there anything else that you would like to add any parting thoughts or best practices?

Nancy May [00:10:53] Well, I'd like to throw out there that if anybody is ever in doubt about what constitutes a pocket listing or coming soon advertisement, please just don't hesitate to reach out to REIN's listings department. We would much rather answer your questions in advance and help you through the process than try to issue a fine later on. Pocket listing violations are brought to our attention regularly by other members, and REIN investigates each one individually. And it always comes down to the dates. If an advertisement is found to have occurred before that list date, it's a pocket listing.

Becky Claggett [00:11:31] I think cooperation is the key. We all do so well with cooperation. It serves our clients; it serves our communities. It's important. Cooperation with our competitors is one of the most amazing things about real estate. We do it well. We have for many, many years. And before I finish, I'd like to do a shout out to all of you at REIN for clearly thinking through these MLS rules to work for all of our members as well as our clients and our customers that they serve.

Andrea Rice [00:11:59] Well, thank you, Becky. Thank you, Nancy. I'm so happy we could do this episode together today, and I want to thank all of you out there for listening. I hope you enjoyed this episode of REINCheck. And if you missed any of our previous episodes, I do invite you to go to REINMLS.com/podcast to take a listen. And if you have not done so already, make sure you subscribe to REINCheck so you can get new episodes delivered directly to you when they are released. Thank you again and have a great rest of your day.

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VO [00:12:30] You've been listening to REINCheck with Andrea Rice. Stay in the know from those who know. Delivered straight from the source, REIN MLS.

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