Off-market properties are (usually) investment properties that don’t get advertised or listed in the real estate market. In some ways, it’s a strategy that offers some benefits for sellers. For example, the seller wants the transaction to remain private. It also reduces the “days on market,” which can put off other investors when a property is listed too long on the market.
But, there are also critics of off-market properties. Buyers who don’t have access to off-market properties are disadvantaged. It can really hurt minorities who don’t have the inside track, which in turn affects the housing market. In some areas, real estate is at a premium because there isn’t enough supply to meet demand.
Many buyers don’t have access to all the listings. Now, the National Association of Realtors (NAR) is doing something to make sure that buyers have more information.
The NAR’s board of directors (comprised of members) voted to ban “pocket listings,” a form of off-market properties. Properties must now be listed in the MLC within one business day of marketing. Properties can no longer be listed “coming soon” to test the market.
Brokers and Realtors cannot offer exclusive properties that have limited marketing but aren’t on the MLS. It’s hoped that this policy will make more properties available for all consumers.
There is an exception for high-profile sellers, who want to remain private. The sellers must sign a waiver for this exception. Realtors cannot advertise the property through any public medium, including social media, broker websites or signs. The property must be in-house exclusive to receive this exception.
The NAR calls this policy “crucial protection for consumers.”
It passed by a vote of 729-70 at the annual meeting in San Francisco. Although it becomes effective on January 1, 2020, NAR is offering an implementation policy until May 1, 2020 for education and technology changes.