'Pocket Listings' Spark Controversy
With the housing rebound in full swing, “pocket listings” are growing in many parts of the country as some sellers look to preserve their privacy, and brokers use them to trigger an aura of exclusivity to a listing. But some in the industry worry that exclusivity may be crossing an ethical line.
Pocket listings refer to situations in which real estate agents purposely keep sales information about a home off the multiple listing services, and brokers only show that house to people they expect to actually purchase it.
The National Association of REALTORS® does not have an official policy on pocket listings, spokesman Walt Molony told CNNMoney. But some real estate boards say they don’t like the practice.
In New York, the practice of “pocket listings” violates the Universal Co-Brokerage Agreement, which requires agents to share listings, maintains Neil Garfinkel, counsel for the Real Estate Board of New York.
Some housing experts also say that pocket listings create a gray area when an agent is able to collect double commission from the deal by acting as the agent for both the buyer and seller. “If an agent is putting their own economic interest ahead of the seller’s, it’s a violation of state law,” Garfinkel says.
However, “most of the time, pocket listings are done ethically and fairly,” Betty Graham, president of Coldwell Banker Previews International/NRT, told CNNMoney.
If the home doesn’t sell quickly as a “pocket listing,” many agents say they’ll then advise their clients to readjust their price and list the home publicly on the MLS. But some agents say a few sellers may prefer the privacy of pocket listings because they’re not highly motivated to move — unless someone offers them a “make-me-move” deal with a great price, CNNMoney reports.
Source: “Secret ‘pocket listings’ return in hot housing markets,” CNNMoney (May 2, 2013)
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