Off-market listings—also referred to as “pocket listings”—are hurting the housing market by depriving home buyers of a full perspective of what’s actually for sale, some real estate agents say. They argue homes that aren’t ever listed on the MLS are then not available to be used as comparable properties for appraisals, other sales, or mortgage refinancing—leaving a skewed picture of the housing market, according to a recent article in The Cleveland Plain Dealer.
A growth in homes unlisted on the MLS in Northeast Ohio is prompting real estate leaders there to speak out, concerned it’s a growing trend. The MLS is a way to share property information and compensation between real estate companies but “pocket listings” are a way for some agents to “keep a bigger piece of the pie” for themselves, says Jeff Russell of Russell Real Estate Services in North Ridgeville, Ohio.
“We see this as a tremendous disservice to our clients,” Russell says. “In my opinion, it’s limiting the exposure of listings to the market …. While it might be good for the broker, it’s not good for the consumer.”
“Pocket listings” are only permitted if the seller agrees to it. If so, agents can withhold the listing from the MLS and just reserve promoting the home among close associates, on the company’s web site, or through word of mouth. Some agents may be tempted to keep the listing internal because they then may be able to keep nearly every aspect of the sale internal and collect full commission, critics say.
Russell and John Lynch of Keller Williams Realty Greater Cleveland West are board members for the Northern Ohio Regional Multiple Listing Service and they say the organization is discussing “pocket listings” and whether rules need to change to reduce the number of off-market real estate deals.
“You can’t put a gun to somebody’s head to make them put their listing in the MLS,” Barbara Kohl, executive vice president of the West Penn Multi-List, a listing service covering Pittsburgh and southwestern Pennsylvania, told The Cleveland Plain Dealer. “You have a right as a home owner. But what we want to make sure of is that the agent is really acquiescing to the homeowner’s wishes.”
The author of this article is: realtormag.realtor.org
See the original post at: http://realtormag.realtor.org/daily-news/2012/11/26/pocket-listings-become-growing-concern
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