Realtors are familiar with the Clear Cooperation Policy that went into effect for all Realtors on Jan. 1, 2020, with implementation in May 2020.
“The Clear Cooperation Policy makes clear that the MLS exists for cooperation and compensation among brokerages. If you belong to the MLS, cooperation is the first, not the last, option to promote a listing. The intent is to strengthen cooperation and address concerns surrounding off-market listings, particularly pocket listings and private listing networks that exclude many consumers.” (NAR)
The rule is:
“Within one (1) business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants.”
The Clear Cooperation rule was made because agents were listing homes and leaving them off the MLS and marketing them in private agent networks or publicly on Zillow and on other websites. Sometimes they just put signs in front of the houses and waited for the phone to ring — and it did ring.
Exceptions to the Clear Cooperation Policy
There is an exception to the Clear Cooperation Policy and, as it has been explained to me, it’s predicated on the idea that some people need privacy while they have their house on the market.
Under the Clear Cooperation Policy, a listing can be “withheld” from the MLS and become an “office exclusive” listing.
“All Withholds are now considered ‘Office Exclusives’ that may not be publicly marketed.”
It is an office pocket listing, but it isn’t called a pocket listing, instead, it is an office exclusive.
Another way of looking at it is that marketing a listing in a private network isn’t allowed but marketing it within a real estate company is. How convenient, especially for large offices. Personally, I see it as a fair housing complaint waiting to happen and do not allow office exclusives.
Office exclusives are needed to protect the seller’s privacy. I often wonder if it was the agent’s idea or the homeowner’s idea. I understand wanting privacy, but I think that is outside the scope of an agent’s job, which is to market the property, advertise it and cooperate with other agents who may have buyers for it.
People who want to sell their real estate privately should consider hiring someone who specializes in secret marketing and sales. That should not be a service provided by companies that are members of NAR because Realtors are all about cooperation.
Keeping the fact that a house is for sale a secret from the neighbors, family, and from children or others who live in the house is challenging. Property records are public, which means a person’s last address could show up in a newspaper as having been sold and the sale price, too.
As for the one-business-day rule, agents don’t always understand the difference between an effective date of a contract and the date that a contract is signed. The concept of a business day is kind of abstract, too; it generally means Monday through Friday but not always.
Pocket listings still exist both as company exclusives and in private agent networks. There is a $1,000 fine for those who get caught with pocket listings, at least in my MLS — different MLSs have different fines.
The ‘office-exclusive’ loophole
I’ll never fully understand the loophole that allows for “office exclusives” or why a network of agents all from the same company is allowed but a network of agents from several companies is not allowed. In both cases, the consumers are being excluded, which defeats the reasoning behind the Clear Cooperation Policy.
I totally agree that Realtors should cooperate. That is the whole point of the MLS, which is needed because without MLSs, there would not be enough houses on Zillow to make it useful. Why anyone would want to be a Realtor but not want to use the MLS doesn’t make sense to me.
Our clients don’t care about our rules, so I don’t bother to explain the fines and penalties an agent incurs if something goes wrong.
The best practice is to have the contract signed on a Friday, which allows two non-business days and a business day to get it ready and in the MLS unless the listing is going to be put in as “coming soon.”
It’s nice to have a sign in the yard when a house goes on the market but, of course, if it goes in two days before the listing is in the MLS an agent can be fined. Services should never be provided without a signed and executed contract, which is why it’s a good idea to have contracts become effective on Fridays.
Saturdays and Sundays are not considered business days, and our MLS also has a two-business-day rule for getting listings in the MLS, even if they are office exclusives.
Seems to me that if the goal is to stop Realtors from having pocket listings, it should simply be listed in the Code of Ethics as a violation. In-house exclusive listings should also be considered a violation. Anyone caught selling a pocket listing should be banned from being a NAR member for two years.
Teresa Boardman is a Realtor and broker/owner of Boardman Realty in St. Paul, Minnesota. She is also the founder of StPaulRealEstateBlog.com.
