Concerns about fair housing violations and anti-competitive behavior led the National Association of Realtors to attempt to curtail the practice of pocket listings outside the same brokerage.

The National Association of Realtors’ board on Nov. 12 voted on a measure intended to crack down on the practice of “pocket listings,” where a real estate agent declines to list a sale on a multiple listings service, and instead markets the sale within a separate, informal network of brokers or others. 

In some cases, Realtors may be trying to avoid having to split the commission with a buyer’s agent. In other cases, their clients may want their home withheld from MLS services due to their celebrity or personal circumstances like a divorce. 

At its Nov. 11 meeting, NAR’s board of directors voted 729 to 70 to approve its “Clear Cooperation” policy, which forces brokers who participate in a multiple listing service to submit their listing to the MLS within one business day of marketing the property to the public. 

Under NAR’s new definition, “marketing to the public” includes everything from yard signs to fliers in windows and marketing material posted on public-facing websites, to email blasts and multi-brokerage listing-sharing networks. All MLSes owned by a local board of Realtors must adopt the NAR policy by May 1, 2020. MLS PIN is not covered by the move, but MLSes covering Berkshire County and Cape Cod and the islands are. 

The policy, under development for some time, was created to address concerns that pocket listings had reached such levels in some markets that it threatened to undermine fundamental market conditions. 

“The multiple listings service is an orderly and efficient marketplace serving the interests of buyers, sellers and practitioners,” NAR General Counsel Katie Johnson said in an explainer video posted on the organization’s website. “It is an indispensable tool that works precisely because realtors have [an] ethical duty to cooperate with other brokers and to respect their relationships with prospective clients…..Any trend or business practice that results in less-complete and less-accurate information should be a concern for Realtors.” 

Pocket listings appear to be on the rise but are notoriously difficult to track. A recent study by online brokerage and real estate listing website Redfin estimated more than one in 10 home sales in the city of Boston in 2018 were not listed in an MLS, for example, compared to 4.46 percent in 2013. The study compared the number of home sales that were in the local MLS to the number of sales recorded in public records. The study did not cover any part of New Hampshire. 

However, off-MLS sales also include sales within families or people who know each other and homes for sale by owners, making it difficult to estimate the true number of pocket listings, a Redfin spokesperson told The Registry Review. The company supported the new NAR policy as a matter of justice, its CEO has said. 

“Academic research shows that it’s would-be buyers who are disproportionately people of color, immigrants and outsiders” who are excluded by pocket listings, Redfin CEO Glenn Kelman wrote in a recent blog post on the Clear Cooperation policy. “These are the ones who don’t belong to the club, who don’t know the secret handshake, or the obscure website, or the private Facebook group, or the right agent.” 

The policy has carve-outs for brokers who market listings exclusively within their office, for brokers whose clients specifically ask for a listing to be withheld from an MLS and for Realtors who tease homes that are not yet in sellable condition with “coming soon” announcements, according to an FAQ posted on the NAR website. If a Realtor wants to tease a listing, they must share that information with their fellow MLS participants. 

“We are in full support of the NAR policy as a way to level the playing field among our more than 6,500 members and the thousands of consumers served by our members,” a statement from the New Hampshire Association of Realtors said. “We’re a trade association that prides itself on a Realtor Code of Ethics, and the transparency and fairness inherent in NAR’s new policy is fundamental to the spirit of that code.” 

New Hampshire’s multiple listings service, NEREN, could not be reached for comment.