The National Association of REALTORS® recently announced changes to its Clear Cooperation Policy that enable sellers to keep some listings private in the short term, a move that Midwest Real Estate Data (MRED) says mirrors policies it rolled out in 2016.
Clear Cooperation requires homes to be listed on an MLS within a day of going on the market. The modified policy allows sellers to postpone the broader marketing of their homes for a period of time, determined by individual MLSs. Under the NAR’s Multiple Listing Options for Sellers, listing agents are required to secure signed disclosures from sellers, stating their informed consent and waiving “the benefits of immediate public marketing” of the property online.
MRED recently updated its 2019 white paper, “Private, not a secret,” with statistics that highlight the MLS’s earlier use of private listings and an outline of what the future may hold.
“MRED exists to provide top-performing real estate professionals the tools they need to serve their clients,” MRED President and CEO Rebecca Jensen said in a press release. “Real estate transactions are very nuanced, and one size does not fit all. This is why MRED’s solution equips professionals with the information they need, where they need it. Our latest changes in listing controls are an extension of this long-held philosophy.”
Courtesy of Midwest Real Estate Data LLC.
MRED launched its Private Listing Network in 2016 as a way to bring transparency to listings that previously had been held off the MLS, according to the white paper. The Private Listing Network was developed as a response to an imbalanced market in which brokerage apps, private listing clubs, yard signs and closed Facebook groups proliferated.
The MLS solicited feedback from agents and built the Private Listing Network to address the reasons sellers withheld their homes from MRED, including properties in need of repair, price testing, seller privacy concerns, pre-marketing strategies and bank-owned properties. MRED’s Private Listing Network built in flexibilities, such as excluding rental and commercial property types. Homes on the Private Listing Network are not automatically syndicated to third-party sites via the Internet Data Exchange feed, though all MRED subscribers have access to the Private Listing inventory.
A 2021 MRED survey conducted among 6,743 agents found that 60% of agents use Private status for marketing, giving them the option to promote properties strategically before they become fully available on the MLS, according to the white paper. Strategic marketing may be necessary for homes needing a soft launch, for sellers who want to limit exposure before their home is officially listed or for high-profile sales that require discretion. Of responding agents, 30% prioritized privacy for their clients for personal or financial reasons and utilized Private listings to control exposure.
The Private Listing Network gives sellers the flexibility to sign a listing agreement and make necessary upgrades, repairs or clean-ups before showing. Additionally, it enables agents to roll out phased marketing packages and test the market. In some cases, sellers may opt for a private listing to avoid showings.
There are trade-offs for those benefits. Limiting a listing to this smaller subset may reduce the ultimate sale price, calling into question the listing agent’s ability to fulfill their responsibilities to their client. Some agents could use Private Listings to act as dual agents and not represent the best interests of both parties. Listing agents who fail to make their clients fully aware of the limitations on marketing could be in violation of applicable Code of Ethics and local license laws. Additionally, county assessors sometimes use MLS data to perform valuations for tax purposes; an off-MLS sale could trigger an automatic audit of the property value.
Other legal considerations come with Private Listings as well. Fair housing concerns may arise when listings are private — a concern MRED said is alleviated by its requirement that listings be visible to all subscribers. Disclosures and confirmation addenda for Private Listings protect consumers by assuring they are informed of the limited marketing associated with an off-MLS sale. Competition and antitrust concerns are addressed by ensuring equal access and opportunity for subscribers.
Under MRED rules, Private Listings are not required to have a specific listing price or photos. All subscribers have access, though Private Listings are not part of IDX listing distribution. Listings must be entered as Private within 24 hours of advertising to the general public or 48 hours of the list date. If a transaction closes while the listing is Private, MRED subscribers must transition the listing to Standard and input all required fields so the property can be used as a comp.
Additionally, a signed listing agreement is required for Private Listings. Brokerages are allowed to receive and display a feed of their own Private Listings, and agents can attach agent-only comments. Private Listings can be easily transferred to Standard Listing drafts and added to the regular MLS without creating a new listing. Listings may be kept as Private indefinitely without accruing Days on Market, though a history of when the listing was submitted as Private is recorded and available to subscribers.