Pocket Listings Are The Careless Whisper Of Selling Homes

Pocket Listings Enable Sellers To Avoid Broadcasting Their Interior Photos
Listings Not Placed On The MLS Have To Be Sold Within The Listing Firm
DOJ Concerned About NAR’s Pocket Listing Policy Because Reduces Competition

When it comes to home marketing, relying on the principle of scarcity is key, especially in new development marketing. I’ve always marveled at the idea of placing multi-million dollar homes on the local multiple listing system (MLS) or portals like Zillow. It allows lurkers like me to go gaga over the 27 different bathrooms presented as digital equivalents of the 8×10 glossy color photographs described in Alice’s Restaurant. It guts the privacy requirement of high-end housing buyers and sellers. Thus, the emergence of “pocket” listings in markets dictated by MLS rules is now a focus of the Department of Justice. The seemingly similar “whisper” listings are largely outside the reach of MLS rules like my Manhattan market.

I just got the fact that Mansion Global’s coverage of Whisper Listings used the same title theme as a Forbes piece on George Michael as his Careless Whisper song cracked 1 billion views on YouTube. Sorry for not sharing the video here. The song isn’t my type, but I’ll stop at nothing to employ nuance and sarcasm in Housing Note post titles.

But I digress

According to the Real Estate News article Pocket listings lawsuit gets (another) new lease on life. MLS systems have seen the rise of private listing networks as competitors, and a recurring lawsuit contends that MLS rules prevent competition.

The private listing service Top Agent Network sued the National Association of Realtors and the San Francisco Association of Realtors in 2020, challenging the Clear Cooperation policy which requires an agent or broker to add their listing to the multiple listing service within one day of marketing it to the public.
This rule effectively locks out private listing services, according to TAN CEO David Faudman. The lawsuit alleges that NAR conspired with SFAR to force agents to list their properties on the MLS, which would increase the fees that NAR collects.
Real Estate News

Placing a listing in an MLS represents cooperation among agent/broker members to share information. If a property is not listed within the MLS, it can only be sold within the brokerage company itself. Compass has gone full-on in this space with its Private Exclusive database touting the benefits:

Private Exclusives are off-market listings only visible to Compass agents and their qualified buyers. This allows sellers to soft launch their upcoming sale to an expansive audience without being officially on the market.
With no online history except on Compass, Private Exclusives do not accumulate days on market, show prior price adjustments, or appear on public home search websites.
Compass

The idea is that their listings don’t accumulate days on market, and sharing their online history or release to public listing portals can be a compelling argument for owners of unique, quirky, and high-end properties who don’t want to use the shotgun blast approach. I had a lot of arguments with real estate agents during the pandemic. The issue was about their sellers enduring long marketing times, and the community encouraged REBNY and Streeteasy to hide days on market during the pandemic. The problem with this rationalization is that ALL listings in NYC during the early days of the pandemic had very long marketing times. Sales dropped by nearly half over the last three quarters of 2020, and marketing times surged. Individual sellers were not alone in their high days on market plight.

But for the vast majority of homes, the general rule in marketing (hey, I was a real estate agent in Chicagoland for six months and one in Manhattan for a year, roughly forty years ago, so I’m obviously qualified to know, ha.) is to get as many eyeballs on the property as possible as quickly as possible. More eyeballs on a property equals a higher probability of an offer.

And then all those buyers will come home to roost.