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Op/Ed

The dangers of pre-MLS, pocket listings, listing clubs, and off-MLS listings

Pre-MLS listings are used for a variety of reasons, but as they become more popular for their advantages, let us look at the disadvantages.

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There are some past real estate practices that are now explicitly illegal. Referral fees deemed harmful to consumers were explicitly banned by RESPA. Dual agency is likewise under scrutiny, with mandatory disclosures being created to discourage the practice and the practice is now illegal in several states, with more states likely to come. If a practice is bad for consumers, it’s not likely to stay legal for long, and those who engaged in the practice might find themselves in serious trouble.

Pre-MLS, listing clubs, pocket listings, and off-MLS listings all fall into this category. All of these involve an agent or broker keeping a property for sale off of the MLS, for sale to a buyer:

  • found by word of mouth
  • found by sharing the property with agents in the same office,
  • found by sharing the property with a larger group of agents over coffee, through email, or through Internet sites.

In all cases, the agent’s aim is to get the entirety of the commission, or at least to have it stay within his own brokerage or other group that provides the agent some advantage. Given everything we know about the dangers of these forms of non-listing for the client:

  • minimizing exposure to audiences, both local and on web, who might purchase the property,
  • minimizing the number of offers received, and
  • property fetching lower sales price,

the agent is clearly privileging his own interests over the client’s. Like referral fees and dual agency, this practice is bad for consumers.

Even the government has taken action

We’ve already seen those “in the know” enact rules requiring MLS listing. In August of 2013, Fannie Mae said that it wouldn’t approve short sales unless the property had had an active MLS listing for at least five straight days including a weekend. I think that’s just the start – the government is aware of the financial harm caused by not giving a listing proper exposure. Take heed.

Some might ask, “Is MLS entry really needed to get top dollar for a listing?” Where it has been studied so far, the answer has been, “Yes!” In one study (at MLSListings), for every $100,000 of home sold, not having an MLS listing cost the sellers an average of $15,000. Do agents really think that once a consumer realizes they may have taken a $150k haircut on that million-dollar home just so the agent can get an extra 2-3% on a transaction, they’re not going to take action?

Financial harm to the consumer isn’t the only issue at hand

Financial harm to the consumer isn’t the whole of the issue either. In a recently published article, attorney Grant Harpold made the following additional points:

  • If a consumer makes a claim against the broker, the insurance company carrying the liability insurance may “take the position that intentionally leaving a property off of the MLS is not covered, i.e., no REALTOR® should be that careless.”
  • Such listings may actually “deny certain people access to the purchase of property. If only certain buyers are allowed to bid on the property, then the REALTOR® runs the risk of being party to a discriminating act, even if unintentional.”
  • A broker or agent may also “be subject to antitrust laws that are in place to promote competition.”

Handling off-MLS listings when clients request them

While the practice may still be legal, Mr. Harpold recommends that agents engaging in the practice explain the risks to the property owner and have them formally sign off on all of the risks – in writing. There may be instances where a sophisticated client – a celebrity or other high-net-worth individual – wants to use an off-MLS listing to protect his/her privacy.

If so, s/he can sign a form explicitly acknowledging the dangers of such a listing. It is worth noting, though, that there are alternatives to off-MLS listing in such a case, such as restricting the listing’s Internet display in the MLS context.

The practice is increasingly popular

In desirable areas with a shortfall in housing inventory, such as the San Francisco Bay Area, this practice is increasingly popular. Fully 29.4% of listings in Contra Costa County, in the Bay Area, were off-MLS in 2012. This provides increasing occasion for bad outcomes and even abuse, all of which will filter back to regulators, trial lawyers, and legislators. Without some tangible incentive for agents to keep listings within the MLS, an unwanted, imposed solution is likely down the road.

If the practice of off-MLS listing continues, we may expect one or more of the following outcomes.

  • NAR will step up and require MLS entry as a standard of practice.
  • Attorneys will smell blood and start a class action lawsuit against brokerages, leading to the practice’s decline.
  • A law will be passed prohibiting the practice.

The real question I’m left pondering is whether this practice will worsen perceptions of the industry before the trend fades away due to market conditions or is stopped by legal means.

This editorial first published in May 2014.

Matt Cohen has been with Clareity Consulting for over 17 years, consulting for many of the real estate industry’s top Associations, MLSs, franchises, large brokerages and technology companies. Many clients look to Matt for help with system selection and negotiation. Technology providers look to Matt for assistance with product planning, software design, quality assurance, usability, and information security assessments. Matt has spoken at many industry events, has been published as an author in Stefan Swanepoel’s “Trends” report and many other publications, and has been honored by Inman News, being listed as one of the 100 Most Influential Real Estate Leaders.

Op/Ed

Sexism is never cured by reverse-sexism

(EDITORIAL) Sexism is still around in 2019; it seems some want to try reverse-sexism, but that just isn’t the way equality works. Just try respect.

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Sexism is, and has virtually forever been, a glaring issue in all areas of the work environment—from recruiting and hiring all the way through invariable work interactions. While the proper “cure” for sexism may elude some employers, we know what absolutely DOESN’T work: reverse sexism.

Let’s get a bit of a disclaimer out of the way: The term “reverse sexism” is often used to insinuate the notion that men are victims of gender-based discrimination on the same level as women—as if the current social and political environments could ever support such a thing.

The idea of a male facing even a fraction of the societal limitations and microaggressions with which the average woman has to contend is cry-yourself-to-sleep laughable, so to apply any notion the same level of discrimination in reverse has no merit whatsoever.

However.

The entire point of rebelling against sexism is not—and should never be—that current sexist practices should be applied to men in addition to women; perhaps surprisingly, the opposite holds true: that women should be treated with the inherent respect and financial support that most men in the workplace enjoy.

See, practicing any kind of discrimination—however small in scale—against any group of people only helps to perpetuate discrimination in general. Refusing to hire men because you’re trying to avoid sexism toward women may seem like a good idea on paper, but it’s really just enforcing the notion that sexism is okay in certain contexts when that just isn’t the case.

Are you with me so far? Good, because it seems that virtually innumerable companies are missing the mark: Google’s solution for the wage gap is to underpay men, and Bumble implements a women-only hiring environment (though this has since been expanded to utilize more inclusive filters). Again, the idea behind this may have initially come from a good place, but the driving principles cause the execution to fall flat when held up against ACTUAL sexism-free practices.

Here’s a thought: Instead of treating your male employees with less respect in order to match your behavior to all genders across the board, or refusing to hire a gender outright, try treating all of your employees (regardless of gender) the same. It’s a little-known tactic known as common decency, and guess what? Doing so is not the least bit sexist.

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Op/Ed

How calendars can stop your procrastination, boost productivity

(PRODUCTIVITY) As the old method of pen-to-paper planning comes back in style, see how its use can help with time management.

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My favorite part of writing for this publication, by far, is the fact that it always has me keeping my eyes and ears open for inspiration. The simplest comment from a friend can snowball into an idea that becomes beneficial to others.

Such was the case this past weekend when my best friend, Haley, stopped by to help me unpack my new house. Haley is a graduate student, pursuing a master’s in interpersonal communication, and is a much smarter version of myself.

We got to talking about what was on tap for Haley’s final semester and she told me about a workshop she’s creating for the graduate school on the topic of how using planners/calendars helps with time management. The girl has an affinity for pen-to-paper planners, and has created an organizational structure for her daily life through their use.

Naturally, I thought, “hey, sometimes I attempt to give people advice on time management and planning, let’s bounce some ideas off of each other.” Haley then gave me a rundown of the bullet points she’s planning on covering for her interactive workshop.

1) Take everything as it comes. As a new task pops up, put it down on your calendar (whether paper or electronic) so that you don’t forget to do it later.

2) With these tasks, schedule deadlines for yourself. It can be tough to be self-motivate and have tasks completed by your own assignment. However, putting them down in writing will help you stick to them.

Only work on something if you’re being productive. If you stop being productive, you should take a step back and work on something else for a while,” says Haley. “This is why my personal deadlines help because it makes me work harder but I still have my own time.”

3) Schedule out your week starting with events that you cannot change. Start by writing down your work schedule, then appointments, meetings, etc. Then schedule in tasks that have more flexibility in time.

4) After doing this, take all of these tasks and prioritize what must be completed first and assess how much time each task will take. Be sure to give yourself an appropriate amount of time for each task.

5) For bigger projects, considering breaking them down a bit. “For bigger projects I break it down into steps, normally using a concept map to understand the core aspects of my task and what needs to be accomplished within each of those to make it more digestible,” says Haley. “Once I have the pieces, I place the pieces into my weekly schedule of events I cannot change.”

All of the pieces of this puzzle come together to create a calendar that will help you juggle every aspect of your life and boost your productivity. By implementing these ideas in my own planning, it has definitely helped me to become more of a self-starter.

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Op/Ed

How anyone can be more a more assertive real estate pro

(OPINION EDITORIAL) Being assertive is not the same as being bossy and while most people tell women to be more assertive, lack of assertiveness isn’t gender exclusive. Here are a few tips how to make your presence known.

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assertive broker meeting negotiation team

Merriam-Webster defines assertive as “disposed to or characterized by bold or confident statements and behavior.” I believe assertive behavior is the balance between being passive or aggressive.

You aren’t demanding, but you’re not dismissing your needs either.

Women are often told that they need to be more assertive, rather than passive, and men need to be less aggressive. I’m more of the opinion that assertiveness isn’t gender-specific. I believe every person needs some assertiveness training.

While I may not be an expert in assertiveness, as a freelancer, I have learned to be more assertive. Here are a few of my observations:

  • To be assertive, I had to stop feeling as if my work was unimportant. Call it confidence or self-esteem, but it was a definite turning point for me. I stopped using the word, “just.” I didn’t apologize for bothering people. I simply began stating what I needed to get the job done.
  • I defined what assertive meant to me. For me, it was the ability to stand up for my opinions and needs. This didn’t happen overnight, but it took practice. One of the key things I did was to try and be more assertive in other places, like when I volunteered. That gave me the confidence to stand up for myself in my work.
  • I use “I” statements. “I need to take next Monday off.” “I need more information about this project.” “I cannot do that this week.”
  • I’ve found that part of being assertive is taking the other person at their word and not holding a grudge. Don’t read more into their emotions than what is being discussed. Just because my co-worker hated the last idea I had shouldn’t stop me from exploring new ideas with the team.
  • It is very difficult to change old behaviors. I have mentors and coaches that I talk to about my successes and failures. This has helped me figure out what I’d do differently if I had the chance. Trust me, it isn’t easy to be introspective about the time you blew it, but it’s been very beneficial in all the areas of my life.
  • I’ve apologized when it was appropriate, but I don’t beat myself up, either. The other day, I missed one part of an assignment. In the past, I would have not taken any more assignments as punishment. Instead, I apologized that I missed it and fixed the assignment. Then, I took another block of work and moved on. It was freeing.

Being assertive isn’t easy. But it is very rewarding.

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