For those who may not be up to date with the current ongoings of the Boston real estate market, let me try to explain what’s going on.
The search for a Boston condo for sale often begins online. But if you set up an alert on your favorite Boston real estate website and assumed you’d be pinged every time a new Boston condo meeting your criteria came on the market, you’d be wrong.
Many large Boston real estate brokerage firms are quietly marketing homes only on their websites or through emails or phone calls before they ever upload them onto centralized websites known as multiple listing services (MLS).
But it gets worse, now large real estate associations want to change the National Association of Realtors new guidelines that were enacted as of May 1, 2020. The new rules would prohibit/cut down on pocket listing.
The lawsuit was filed Monday in the U.S. District Court for the Northern District of California by Top Agent Network, a San Francisco-based, members-only platform for real-estate agents. The suit names as defendants the NAR, the California Association of Realtors and the San Francisco Association of Realtors. It seeks unspecified damages and to reverse NAR’s newly enacted “Clear Cooperation Policy,” which went into effect May 1. The new policy requires NAR members to share their listings through the local multiple listings service rather than shopping them privately to a few contacts, a practice increasingly preferred by wealthy and high-profile sellers. Members who violate the policy face punishment, including fines.
Top Agent Network, a communication platform that vets top producing agents and offers them sales tools and market intelligence in exchange for an annual fee, began as an email list in 1995. Today it’s a national company with 31 chapters and 10,000 agents in Texas, Arizona, Illinois, Maryland, D.C, Virginia, California, Oregon, Hawaii and Massachusetts.
Read more: Wall Street Journal
While the pocket listing rule was enacted in part to end the practice of agents restricting access to their listings while retaining access to other agents’ listings. In other words, what the NAR was trying to prevent, is the practice of a large real estate offices with exclusive listings, telling their agents, you can’t talk to agents at other brokerages, but you can talk to all the agents in our brokerage firm about our pocket listings. This encourages large brokerage companies to get both ends of a real estate sale transaction and gives smaller brokerages a huge disadvantage.
It could take years to settle this lawsuit, but in the meantime, many agents will likely continue to find ways to address the demand for off-market deals. In an era of information explosion, Boston real estate data remains tightly controlled, and when it’s exclusive, highly coveted.
This is not a vindictive angry thing; this is trying to do what’s right for consumers
This lawsuit really has no merit. Here’s why, Sellers and their brokers still have an option to exclude their listing from the MLS if they sign off on it in writing from the Seller, in which case the property can be marketed to agents within the brokerage. TAN (the plaintiff in this lawsuit) is an exclusive real estate organization, not open to everyone, just agents who are at the top of producers in their markets.
The widespread use of private exclusives and pocket listings is, on the face of it, a violation of fair housing laws — unintended perhaps, but you can’t get around the fact that marketing within “elite” and “exclusive” clubs or brokerages is going to have a disparate impact. Remember the bad old days, when agents and sellers tried to keep “certain” buyers out of “their” neighborhoods? Like it or not, the explosion of private exclusives feeds is not too much different. What govt agencies are monitoring these fractured pocket listings? Marketing to “Their (certain) people”
Boston Real Estate and the Bottom Line
On the face of it, private exclusive listings or as the industry calls them – pocket listings, are generally anti-competitive and not in the best interests of buyers or sellers. Truth be told. They serve only one main function, to ensure that the listing broker has control of both sides of the deal, benefiting the brokers and the large brokerage firms they work for.
If the NAR loses the lawsuit this is what will happen: Compass with have their exclusive listings among their team members, this will be followed by Realogy (which owns Coldwell Banker, Sotheby, ERA, Century 21, Better Homes and Garden to name a few) will have their private listings. Followed by Christies, Douglas Elliman, Keller Williams (KW). Where does it end?
My last thought, I don’t support a fractured listing marketplace where there is not a single source of good data. Boston condo buyers will have to jump from one website portal to another to find all the exclusive listings that each group is hoarding. This lawsuit contradicts itself and actually makes it harder, not easier, for sellers and buyers to meet in an open and transparent marketplace. The only winners are the members of large real estate companies and their franchises.
In other words, it’s unAmerican.