The Northwest Multiple Listing Service recently sent out Legal Bulletin 198 and revised listing agreements and rule 2 to prevent members from doing “pocket listings.”
Members of the NWMLS, like Criterion Properties, are prohibited from utilizing “pocket listings.” A pocket listing is where a real estate agent does not utilize the MLS in the sale of a property and instead markets the property “in house.”
The issue with pocket listings is they are almost never in the best interest of the seller of the property. By limiting the marketing of the property to folks the listing agent comes into contact with, rather than fully exposing the property to the market, it is unlikely the highest and best offer for the property is obtained so the seller receives less for their property.
The NWMLS revised their listing form to include a “list date” which allows the seller and listing broker to properly prepare a property for the market before putting it on the MLS. It also specifically prevents the property from being marketed before it is available on the MLS. Here is an excerpt from legal bulletin 198:
The purpose of these revisions is to give the listing firm and the seller time to prepare the property for sale. This might include cleaning the property, making repairs or improvements, staging the property, taking photographs, preparing promotional materials, and otherwise readying the property for the market. The purpose of this revision is not to give the listing firm a head-start in finding a buyer for the property, as the listing agreement and NWMLS Rules strictly prohibit such action.
The revisions to the listing agreement prohibit both the listing firm and the seller from promoting or advertising the property in any manner whatsoever before the listing is submitted to NWMLS. This prohibition includes, but is not limited to, yard or other signs, flyers, websites, emails,
texts, mailers, magazines, newspapers, open houses, previews, showings, or tours. This includes both promotion and advertising to consumers and other brokers. To help the seller understand the importance of this limitation, the revisions include the seller’s acknowledgement that exposure of the property to the market through NWMLS will increase the likelihood that the seller will receive fair market value for the property.
The only benefit of a pocket listing for a seller is that the sale can be conducted with a bit more privacy. However, when you don’t tell all potential buyers you are trying to sell something, the likelihood of getting a good price is greatly reduced.
At Criterion Properties, we have always insisted on acting in our clients’ best interests, and we have never allowed “pocket listings” or “dual agency.” That makes us highly unusual in the Lake Chelan real estate industry.