When you hire a real estate agent, your home is typically listed on the local Multiple Listing Service (MLS). Here in Utah, we use the Wasatch Front Regional MLS, or WFRMLS. The MLS is one giant database of all the homes for sale in an area, listed by licensed agents who pay to have access to the MLS. This is obviously one advantage over listing your home for sale by owner, as there are thousands of eyes on the MLS each day.
Do You Have to List on the MLS?
Historically, home sellers could opt out of being listed on the MLS. Although very rare, some sellers had their reasons. Celebrities, for example, may not want their home and address posted on the internet. In most cases, however, it presents a huge advantage to a seller to have their home in front of as many other agents as possible. Additionally, the MLS is searchable by the general public, although agents do have access to much more enhanced information and more specific search capabilities. The big third-party real estate websites also scrape the MLS and give sellers extra exposure there.
Recent Trends in the MLS (What in the World is a Pocket Listing?)
Recently, we've been seeing agents delay or opt out entirely of adding homes into the MLS. Instead, they have been marketing these homes to their own private network. This often includes sending around the listing to other agents, sending an email blast to a curated list of potential buyers and home investors, placing a sign in the yard with a "coming soon" sign, flyer distribution, and other marketing tactics outside of the Realtor-run MLS. This tactic of marketing only to a small pocket of interested buyers has been dubbed a "Pocket Listing."
Recent Changes In Pocket Listing Policy
This month, we attended the National Association of Realtors (NAR) Conference in San Francisco. This yearly gathering is the largest annual event for real estate professionals, with hours of education, technology, and policy updates. This year, Pocket Listings were a hot topic. In an effort to create a more transparent and open market for real estate, the National Association of Realtors board recently passed a cooperation policy to limit the practice of Pocket Listings. It compels agents to add their homes to the MLS within one business day of any action announcing that it's for sale. If a yard sign goes up, or an email goes out, it has to be listed on the MLS within a day (with a few exceptions).
Our Take: What Does This Change Mean To You?
Proponents say that keeping one big database in the MLS allows agents to better serve their clients, and ultimately puts your home in front of the most amount of buyers possible, creating demand that ultimately gives you the highest sales price. Opponents believe there is great value in letting you "test run" the market with a Pocket Listing before going public with it. Here's the deal: we think you should decide. There's no one size fits all approach, but we think you should not only be aware of what your agent is doing, but also work with them to make the right call. Consumers should be able to dictate how their home is marketed, and having a conversation with your agent will help you do what's right for your particular situation.
Our SunCrest Market Update is a hyper-local analysis of the most up-to-date information regarding the SunCrest real estate market. The previous month's SunCrest housing information and future editions are released monthly.