You may have heard these listings called by any number of names: off-MLS listings, waivered, exempted, exclusive, or pocket listings. Whatever you call them, they are all properties that are listed for sale with an MLS member but NOT published to other Participants through the MLS.
YOU MUST FOLLOW MLS RULES:
As a member of the MLS, you must always follow Rules and Regulations with regard to listings.
- You have two business days once a listing contract is signed by the seller(s) to submit a listing to the MLS.
- Only the seller—not the agent or broker—can decide to exclude a listing from distribution through the MLS. And that is why the seller is required to sign and provide documentation.
The exclusion document alerts the MLS that a signed listing agreement is in place for the property, and confirms the seller is aware that withholding the listings from distribution through the MLS may adversely affect its exposure and their goal of getting the best price for their property
View the following information from NAR Legal Counsel Katie Johnson:
Are Your Clients Best Interests Being Served?
The National Association of REALTORS® (NAR) has responded to the recent industry discussion surrounding “coming soon” listings by reminding members that, “‘The first important step in advising a seller-client on whether to advertise a property as ‘coming soon’ is to identify the client’s best interests, as defined by that client…Failing to act in the client’s best interest and failing to disclose the pros and cons of a limited marketing plan, such as ‘coming soon’ advertising, can violate state real estate license laws and regulations, MLS policies, and the REALTOR® Code of Ethics.'”¹
Read more from NAR’s response to coming soon listings here.
You can also read NAR’s guidance for members on the use of coming soon listings here.
While the MLS will honor a sellers request to opt-out of that’ listings distribution through the MLS, REALTORS® are bound by the Code of Ethics to protect and promote the best interest of the client.
Listings that are not included in the MLS usually have limited exposure, prompting fewer offers and thereby reducing the possibility that your client will get the best and most reasonable price and terms.
Most sellers just want the highest price possible for their home. The best way to accomplish that goal is to make sure their home is exposed to the maximum amount of potential buyers. There is evidence indicating that off-MLS listings usually don’t produce the best price for the seller due to limited exposure.
Should your client have privacy or other legitimate concerns and want to keep the listing off the MLS, explain the pros and cons of how this could affect their sale.
What about Louisiana Law & the LREC?
Louisiana License Law and the LREC Rules & Regulations further state:
2503. Owner Authorization
A. No broker or licensee sponsored by said broker shall in any way advertise property belonging to other persons as being for sale or rent or place a sign on any such property offering the property for sale or rent without first obtaining the written authorization to do so by all owners of the property or their authorized attorney in fact.
If you have a listing agreement (employment contract) with the seller, that agreement should give you sufficient authorization to market the property. Advertising a property that might be “coming soon” without that documentation may not only be a potential violation of the Code, but also could be a violation of LREC Rules and Regulations and the basis for action by LREC that could result in fines or suspension or termination of your license.
What Are The Potential Impacts Of These Listings to the MLS Community?
The primary purpose of the MLS is to foster cooperation and establish offers of compensation among participating brokers. Instead of promoting cooperation, the use of pocket or coming soon listings may discourage and may dampen that spirit of sharing listing information, as well provide no assurance of cooperative compensation should you find yourself involved in a transaction that includes a non-MLS listing.
Outside of the effect these listings could have on your seller, pocket listings also adversely affect information everyone relies on the MLS to provide.
Skew appraisals
Since many parishes are slow to record sales, information about non-MLS listings may not be available to appraisers within the required 90-day history window. For that reason, appraisers may not be able to use off-MLS properties, possibly causing inaccurate appraisals. Additionally, many lenders will not allow non-MLS sales to be used as comparables because those properties were not adequately exposed to the market and, therefore are not an accurate representation of market-driven prices.
Make it more difficult to determine a listing price or offer
Brokers and salespersons heavily use the MLS database of comparables to help sellers determine list price and to help buyers determine what they should offer. Sales that aren’t included in the MLS lead to incomplete and inaccurate results.
Stay Compliant, Serve Your Clients
Despite the ongoing industry discussion about on this topic, remember these two things: you are still required to comply with MLS listing entry rules and you have an obligation to act in the best interest of your clients. Keep these two things in the forefront of your mind and you can avoid running into trouble when confronting off-MLS or coming soon listings.
