MRED Increases Fines For Late Submission to MLS

by Peter Ricci

MRED has raised its fine for agents who do not enter their listings into the MLS within 72 hours, pending an exemption from the seller.

mred-pocket-listing-fee-russ-bergeron

Midwest Real Estate Data (MRED), Chicagoland’s MLS, has raised its fine for not entering properties into the MLS within 72 hours of obtaining a listing agreement, upping the amount from $100 to $1,000, according to a report from Chicago Real Estate Daily.

The increase, explained Jeff Lasky, the director of communications and training for MRED, is aimed at “putting more teeth” into the 72-hour window and incentivizing agents to enter their listings into the MLS in a more timely fashion.

Self-Policing the MLS

Lasky emphasized, though, that the increased fine does not amount to a crackdown on pocket listings, of which there are exemptions for agents pursuing that selling strategy.

“This isn’t MRED aggressively going out there and policing pocket listings,” Lasky said. “The rules have been around forever.”

Those rules, explained Lasky and MRED CEO Russ Bergeron, are quite straightforward: agents can opt to not list their client’s property on the MLS, but they need to have the seller sign a waiver form acknowledging that by forgoing the MLS, they are missing out on the benefits of such a service.

The process for tracking listings that do not appear on the MLS, Lasky said, is largely conducted by Chicagoland agents.

“This is a cooperative,” Lasky said. “The agents police themselves.”

Typically, Lasky said, MRED’s compliance department will receive calls from agents who see yard signs for homes that are not listed on the MLS; then, the compliance department will contact the listing agent and see if they have the necessary exemptions to not list the home on the MLS – only then does MRED request a copy of the seller’s waiver form.

And not many requests, Bergeron explained, ultimately result in fines. In the last 12 months, he said, MRED has received 650 reports from members on non-listed properties, but just 140 of those reports resulted in a fine.

The Dilemma of Pocket Listings

We’ve covered pocket listings quite extensively in recent months, and for good reason – they remain one of the more consistently controversial selling strategies in real estate today, what with housing inventory remaining low throughout Chicagoland (inventory was down more than 28 percent in June, according to MRED).

But as Sam Powell, an agent with Dream Town Realty, explained in a recent Chicago Agent issue, there can be value in a pocket listing approach, which can amount to a “sneak peek” for a brokerage’s most valued clients.

“Some real estate companies have a tremendous database of buyers who have clearly expressed interest in certain properties,” Powell said. “So allowing them a kind of ‘sneak peek’ has been successful in driving traffic to a property before putting it onto the open market.”

Bergeron also said there are legitimate reasons for agents to keep their listings off the MLS, especially if the client has security concerns regarding the publicity of their home sale (if, for example, Mayor Rahm Emanuel were selling his home).

Are pocket listings something you pursue in your real estate business? Let us know your thoughts in the comments section.

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  • Russ Bergeron says:

    Here is where the story is wrong:

    1. MRED has not increased a pocket listing fee because there is no such thing as a pocket listing fee. We do not charge for any kind of listing. And if a broker chooses to use off-MLS listings as part of their business strategy we, as an MLS, have no say in the matter whatsoever. That is a business decision and we do not tell our brokers how to run their businesses.
    2. The “fee” mentioned is a fine, and is only issued to those people who fail to enter their listings, or revise them within the 72-hour requirement of our rules and regulations. If the listing has been exempted by the seller in writing then there is no fine for the omission of that listing.

  • Dennis Dooley says:

    “a “sneak peek” for a brokerage’s most valued clients” disallows the maximum number of prosective buyers the seller gets to expose their property to and minimizes the opportunity for multiple offers (which generally drives up the final price a seller receives).

    Article 1 of the Realtor Code of Ethics is very clear about working only for the client’s best interests. Under most conditions, shopping off market listings only to a select group of agents has only one beneficiary – the agents and their company. It may also be actionable grounds for Breach of Fiduciary Duty.

    Most Brokers will pat themselves on the back for how smart they were to deliver to their agents a clever means of keeping sales all in house – until they all get sued by a seller that feels he was cheated out of a higher price by their actions.

  • Russ Bergeron says:

    Thanks for the corrections.

  • Peter Ricci says:

    You’re welcome, Russ!

    For our readers: an earlier version of this story did not accurately describe MRED’s policy on when listings should be entered into the MLS; we regret the error, and have updated the story to better describe MRED’s policy.

  • Bill Jansen says:

    If you have so many buyers that you feel that you must act outside the rules of the MLS then don’t belong to the MLS and play by your own rules and do your own thing but not within the MLS. You can’t pick and choose which rules you wish to play by.