Some real estate leaders in Northeast Ohio say a rising trend of listings sold outside of the MLS is hurting homebuyers and sellers, though the president of the largest brokerage company in the area disagrees, the Cleveland Plain Dealer reports.

Some real estate leaders in Northeast Ohio say a rising trend of listings sold outside of the MLS is hurting homebuyers and sellers, though the president of the largest brokerage company in the area disagrees, the Cleveland Plain Dealer reports.

Members of the Realtor-owned Northern Ohio Regional Multiple Listing Service (NORMLS) must add their listings to the MLS within 72 hours or face penalties and fines — unless the seller signs off on selling the property as an "off-market" or "pocket" listing. NORMLS is considering whether it needs to change its rules to encourage fewer off-market deals, the Plain Dealer said.

Critics say such listings receive less visibility, harming sellers who want to fetch the highest possible price for their home, and buyers, who don’t get a complete picture of the market. Listings not in the MLS also cannot be used as comparable properties for appraisals and other mortgage financing purposes.

MLSs evolved as a way for brokers to cooperate and make offers of compensation. Typically, seller’s agents will offer buyer’s agents a commission split to bring buyers to the table.

Opponents of pocket listings note that brokerages that encourage such listings are more likely to complete the entire transaction in-house, thereby collecting both sides of the commission. Brokerages with affiliated businesses also stand to pick up the mortgage and title work for the deal.

Howard "Hoby" Hanna, president of Howard Hanna Ohio and a member of the NORMLS board, said it’s important that agents enter information about off-market sales into the MLS once they’ve closed, so that other agents will be able to use them as comparable sales.

But Hanna disagreed with the idea that pocket listings might be harmful to the industry in other ways, saying agents use a listing’s off-market status, with its air of exclusivity, as a marketing tool. Hanna told the Plain Dealer that he hasn’t actively encouraged agents to keep their listings in-house.

The brokerage company is by far the biggest player in the Cleveland area with the highest number of closed transaction sides and highest sales volume in the area last year, according to Real Trends. The company also offers mortgage, title, escrow and insurance services.  

Sellers may wish to keep their listings off the MLS for several reasons, including privacy concerns. If an agent holds a listing off the MLS without the informed consent of the homeowner, however, that could be a violation of real estate license law, Ann Petit, superintendent of the division of real estate and professional licensing at the Ohio Department of Commerce told the Plain Dealer.

Petit encouraged those who believe they have seen harm to homeowners as a result of pocket listings to get in touch with the department.

Check out more Ohio real estate prices here.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Success!
Thank you for subscribing to Morning Headlines.
Back to top
×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription
×