Access to information is the name of the game these days. Doesn’t matter what that information is…if you know something that someone else doesn’t, you are ahead of the game.
In real estate, as you know, pocket or off-market listings, sometimes called “whisper” listings, have been the name of the game for a long time. An owner, oftentimes a celebrity and/or luxury owner, wants to sell a great property but doesn’t want her/his security or privacy compromised by letting “the world” know about it via MLS so she tells her agent, but only her agent, that the property is available. That agent and only that agent has the information and authority to market that potential sale.
Fair/unfair, ethical/unethical that every agent hasn’t the information associated with that off-market/pocket/whisper listing? Not ethical, according to Katie Johnson, general counsel for the National Association of REALTORS®. “As a general practice, actively discouraging the submission of listings to MLSs is inconsistent with the fundamental cooperative nature of the MLS and the obligations of the Realtors’ Code of Ethics.”
Fair or unfair, ethical or unethical, the way it stands right now is that off-market, pocket listings are a fact of real estate life as long as the owner of the property knowingly approves the status of the listing. According to some estimates, pocket listings represent 18.9& of all homes for sale and 61.9& of all listings over $4M.
This fact of real estate life, however, may change soon when the Federal Trade Commission and Department of Justice consider the nature of fairness and ethics regarding pocket listings at an upcoming joint workshop.
In the meantime, agents and brokers who have inside tracks on pocket listings continue to work those listings accordingly. And those agents and brokers who want that inside track to pocket listings nation-wide can join the Pocket Listing Service (PLS.com.) Launched last summer by agents in London and Los Angeles claim some $1.4B worth of listings and 2,500 agent users. Owners of the site say that PLS “…is about bringing the power back to the real estate agent from companies such as Zillow and Trulia that have been taking that power away from agents.”
We’ll keep you updated regarding what the DOJ and FTC decide the ethics and fairness of off-market/pocket/whisper listings. .