Coronavirus not slowing down NAR’s pocket listing policy

The National Association of Realtors’ pocket listing policy is set to kick in soon, and it looks like coronavirus won’t be slowing it down.

The Clear Cooperation Policy, also known as MLS Policy Statement 8.0, will require listing brokers to submit a listing to their multiple listing service within one business day of marketing a property to the public. The controversial rule is meant to effectively end the growing practice of publicizing listings for days or weeks without making them universally available to other agents.

Approved in November, the policy’s implementation deadline for Realtor-affiliated MLSs is May 1. With a month left to go, Inman reached out to MLSs nationwide to see whether the outbreak was impacting their deployment of the policy. Thirteen MLSs representing nearly 500,000 agents and brokers told Inman that the pandemic was having little to no impact on the policy’s rollout and all had either already implemented the policy or were preparing to do so on or before May 1.

Several are adding a “Coming Soon” status for the first time as part of the rollout. Some are instituting weighty fines for violations right away while others are delaying fines for awhile as subscribers adjust.

Rene Galicia, NAR’s director of MLS engagement, told Inman that the 1.4 million-member trade group felt it was important to maintain the May 1 deadline despite the outbreak, and noted that any MLS that has trouble implementing the policy should contact NAR’s MLS team.

NAR has also set up a resources page answering questions about the policy. Galicia noted that MLSs are allowed to delay fines for violation of the policy and “have done so in the past for the rollout of new rules to account for an educational period, technology implementation, etc.”

The Council of MLSs (CMLS), which has 220 MLS members serving more than 1.3 million subscribers, is recommending an “education first” approach to fine enforcement to “make sure people really understand” the policy, CEO Denee Evans told Inman. “We still have time to continue that education and outreach” before the deadline, she added.

California Regional MLS, the nation’s largest MLS with more than 101,000 subscribers, planned to hold off on fines even before the outbreak, CRMLS CEO Art Carter told Inman.

“Our process was always going to include a warning period prior to any fines being levied,” Carter said via email. “We know that the real estate community needs some time to digest and understand these new rules, and we intend to focus on education rather than fines in the first few months.”

CRMLS is launching a Coming Soon status as part of the rollout. As of May 1, CRMLS’s proposed process for complying with the policy is that after a seller signs a listing contract, the listing broker has two business days from the contract date to enter the listing into the MLS under Registered, Coming Soon or Active status, and within one business day of marketing the property, the listing broker must have the listing under the Coming Soon or Active status, the MLS said on its website.

Registered status means that the listing cannot be marketed, is not displayed in the MLS to other subscribers, does not offer commission to a buyer’s broker, accumulates no days on market, is not distributed to third-party listing sites and is only available for showings to the listing broker’s clients.

“With the new process, anything you would have done a waiver for can be accomplished underneath the Registered process,” Carter said in a video about the new policy. Office exclusives, in which a listing may be promoted only within a listing brokerage and to that listing brokerage’s clients one on one, are allowed under the new policy and are allowed under the Registered status, according to CRMLS.

Days on market will not be counted under the new Coming Soon status because, while marketing of the listing is allowed, the listing will not be sent out to third-party sites such as Zillow or realtor.com, and showings will not be allowed under that status, according to Carter. Coming Soon listings are displayed in the MLS to other subscribers and offer a commission to the buyer’s broker.

Listings will be allowed to stay in Coming Soon up to 21 days and then automatically switch to Active. Once in Active, DOM start to accumulate, showings are allowed and listings can be sent to third-party sites.

Shawn Dauphine, director of the Houston Association of Realtors MLS, told Inman that HAR is still developing local policies for its new Coming Soon status launching at the end of April.

“[We] will be providing listing agents with plenty of notice and opportunity to comply before enforcement measures are taken on a specific listing,” he said via email, adding “Much of the education will come as MLSs begin notifying listing agents for non-compliance.”

HAR, which has 37,500 MLS subscribers, will have an escalated fine schedule for repeated offenses, but in light of the pandemic, HAR has not yet decided when it will begin enforcing fines and will continue to evaluate enforcement mechanisms as time passes, according to Dauphine.

The coronavirus outbreak has made communication with subscribers about changes related to the policy more challenging in the sense that the trade group’s communications have been primarily focused on issues related to the disease, Dauphine added.

St. Louis-based MARIS, which has about 13,500 subscribers, just debuted its own Coming Soon status as part of its overall implementation plan for Clear Cooperation, CEO Tim Dain told Inman via email.

In response to the pandemic, MARIS is allowing listings to stay in Coming Soon status for up to 60 days — up from 21 days allowed under normal market conditions, he said. MARIS’s board will decide when to end that extension when the economy starts to return to something “normal,” according to Dain.

“Outside of that small change to our rollout plan we have no other plans to change our implementation. As we progress the board will make any decision on fee enforcement as we get closer to 5/1,” he said.

Miami Realtors’ MLS (49,400 subscribers) is launching Clear Cooperation on April 20 and doesn’t anticipate any impact from the novel coronavirus.

“I think it’s because we’ve prepared our members for it. In all honesty, our policies prior to Clear Cooperation made it a very easy transition. We didn’t allow Coming Soon listings and pocket listings when reported had to comply with MLS rules” regarding seller opt-outs, Deborah Boza-Valledor, Miami Realtors’ COO and CMO, told Inman in a phone interview.

Plus, she added with a chuckle, “Our members have always been very diligent in reporting people. For us it’s not a huge leap.”

Miami will be rolling out a Coming Soon status at some point, but not in conjunction with Clear Cooperation, Boza-Valledor said.

The MLS’s new fine schedule will also kick in on April 20. The first violation will be $2,500, the second $5,000, and the third $7,500 and the offending broker will have to go before an MLS review panel. Boza-Valledor described the fines as “pretty hefty” and “not a ‘cost of doing business’ fine” that a broker might be tempted to just swallow in order to keep violating the rule.

“But our association has always embraced the opinion that we’d rather have education and integrity of the MLS first before we collect fines. If we can correct behaviors, that’s more important than collecting money,” Boza-Valledor said.

A few MLSs implemented the policy even earlier: The Minnesota-based NorthstarMLS (19,754 subscribers), Stellar MLS in Florida (about 58,500 subscribers), and Metro MLS in Wisconsin (8,673 subscribers) all put Clear Cooperation in place on March 1, while Utahrealestate.com (16,518 subscribers) enacted it on February 1.

“In the weeks that followed, it was accepted as a matter of fact (with exceptions). In fact, it was widely applauded as overdue,” NorthstarMLS CEO John Mosey said.

No firm plans to relax or suspend rules because of COVID-19. Mosey said that “would undermine the faith in the MLS and NAR of those who do abide and those who believe it is overdue.”

In the first two weeks of the policy’s debut, NorthstarMLS had six warning conversations with violators, according to Mosey. “Since then we’ve issued five fines for flagrant violations but waived all five as part of the education process,” he said. The first violation comes with a $1,000 fine and fines escalate from there.

He expects the vast majority of subscribers will get the message. “We typically achieve compliance for any violation without a fine being assessed (including waivers) in 98% of all cases. We have been very successful over a long time in using our compliance administration because we treat each event as an education opportunity; however, there are a few who are slow or reluctant learners,” he said. “If the same person repeats the offending activity, we look at the circumstances and history of the individual. Was the repeat offense inadvertent, willful, other? No one has reached the third time where the fine is waived.”

In an effort to slow the disease’s spread, Metro MLS made home showings voluntary instead of required when a listing is in Active status, but “a listing agent or broker cannot selectively not show a property to a competitor but still show it themselves. This would be a violation of Clear Cooperation,” CEO Chris Carrillo said.

Metro will fine a first violation of the policy within a two-year period $1,000 per day, a second violation within two years $2,000 per day, a third violation within two years $5,000 per day and a fourth violation within two years $5,000 per day and suspension of MLS services for the violating agent for 30 days. Continued abuse could lead to the suspension of MLS services for the listing broker, the MLS said.

The first fine is suspended for six months and then waived if the violator has no subsequent violations during that time, according to Carrillo. Metro has not had any complaints or violations so far.

At Stellar MLS, violation of the policy is considered a “level three, severe fine” and comes with a $500 penalty for a first offense and $2,500 for a second offense. Subscribers who commit the same violation a third or more times will have a mandatory hearing before a board panel that may result in up to a $15,000 fine and possible suspension or termination of MLS services, the MLS said on its website.

Meanwhile, Chicago area-based Midwest Real Estate Data (MRED)’s Clear Cooperation Policy has been in place for several years and was the basis for NAR’s policy, according to MRED spokesperson Jon Broadbooks.

MRED’s 45,000 or so members “are very familiar with the policy, and as a result of this familiarity we plan no changes in light of COVID-19,” Broadbooks told Inman via email.

MLSs that are broker-owned, not Realtor-owned, don’t have to follow NAR’s policies but sometimes choose to. For instance, broker-owned Alaska MLS (just under 2,200 subscribers) decided not to adopt the policy, but broker-owned First MLS in Georgia (nearly 46,000 subscribers) decided it made sense to implement it.

“We adopted NAR 8.0 on November 13th of last year, recognizing that the policy was in large part put forward from the brokerage community through the efforts of the NAR advisory groups and committees, and it was in line overall with many aspects of our rules and regulations already in place and our August 2019 launch of a Coming Soon Status which can provide some functionality to help support implementing 8.0,” CEO Jeremy Crawford told Inman via email.

The outbreak has not impacted the policy’s deployment for REcolorado (25,000 subscribers) or North Texas Real Estate Information Systems (40,000 subscribers). Both expect to meet the May 1 deadline. REcolorado does not plan to issue fines until September and the first violation will be a warning, the MLS told Inman.

New York-based OneKey MLS, Silicon Valley-based MLSListings and the Austin Board of Realtors declined to comment for this story, while Georgia MLS, Arizona Regional MLS, Tennessee-based Realtracs, Oregon-based Regional MLS and Louisiana-based Gulf South Real Estate Information Network did not respond to requests for comment.

Email Andrea V. Brambila.
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