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A new report from Broker Resource Network, a trade group for residential real estate brokerages, suggests the National Association of Realtors’ efforts to stem potentially discriminatory off-market listings is having the opposite effect.
After analyzing data extracted from the 24 multiple listings services its members belong to – including Massachusetts’ MLS PIN – the report concludes that NAR’s Clear Cooperation Policy appears to have caused the number of off-market listings to more than double after it was introduced in May of 2020.
The report measured this apparent increase in off-market listings via the number of “zero days on market” properties, which sell within 24 hours of being listed on an MLS. The report compared the number of listings with zero days on market between May 2019 and April 2020, and between May 2020 and April 2021. In some markets around the country, the report broke out statistics by brokerage. The report did not compare the overall number of zero-days-on-market listings to the total number of listings in an MLS.
While several normal types of transactions, such as for-sale-by-owner, would be recorded in an MLS as having zero days on market, the report suggested a big jump in office exclusives could be a cause. Listings advertised as “coming soon” can also attract offers that are opened the day the listing hits the market. The report stopped short of assigning blame for the increase, however, and called for brokerages, MLSs and Realtor groups to collaborate on understanding the cause. The report includes reactions from several MLS leaders around the country generally disputing the report’s assertions that the increase in zero-day-on-market listings reflects a greater prevalence of off-market sales in their markets, generally blaming the hot housing market for the jump.
In its announcement of the research, the group declared the act of releasing a research report to the public – which it normally only makes available to members – shows how seriously it takes the issue.
“This is a very important issue for our industry,” Broker Resource Network President Kent Hanley said in a statement. “If this trend continues, we fear that it may erode the importance of the MLS, have devastating impact on fair housing, and create other business issues that would impair cooperation across our great industry.”
The Clear Cooperation Policy requires brokers to submit their listings to an MLS within one business day of marketing the property to the public, which includes everything from placing yard signs and fliers in brokerage windows to email blasts and multi-brokerage listings-sharing networks. In-office exclusives are not covered. Neither are properties whose owners specifically ask for a listing to be withheld from an MLS, nor “coming soon” announcements. .
The policy was created amid rising concerns that agents who don’t market properties via MLS services are at risk of committing fair housing violations because agents’ private marketing networks are likely going to be limited by race or other, similarly protected factors. Many agents also decry the practice as being anti-competitive and unfair to Realtors and clients.
Because several MLSs, apparently including MLS PIN, could not verify the data underlying the Brokerage Resource Network’s findings or told them that publishing the data culled from their service would be a violation of their rules, the extent of the problem is unclear in Massachusetts. In addition, while MLS PIN has not been required to implement the policy since it is not owned by a Realtor trade group, it has adopted rules of its own that broadly echo it, with the exception that in-office exclusives are still allowed to be publicly marketed.
However, an analysis of MLS PIN and Cape Cod & Islands MLS data reported by Realtor associations, and sales statistics reported by The Warren Group, publisher of Banker & Tradesman, suggested that the number of off-market sales increased markedly over the course of the pandemic in certain submarkets. Agents involved off-market sales told Banker & Tradesman that the pandemic’s intense market pressures helped fuel demand for the practice.
Updated 1:13 p.m. Nov. 4, 2021: This story has been updated to clarify MLS PIN’s own policies regarding off-market listings.
