The National Association of Realtors (NAR) board of directors voted last week to ban off-market listings—ones that agents promote outside of their local Multiple Listing Service (MLS). The policy will take effect on January 1, 2020 and will be fully implemented starting May 1, 2020 to give the hundreds of MLS’s time to make tech changes and educate users.
I agree, in general, that buyers and sellers benefit from full MLS exposure. However, there are situations in which it may not be beneficial for sellers to go the full marketing distance. Privacy concerns, tenant-occupied properties and trial list price runs are reasons why some sellers would prefer to wade into the marketing waters in a lower-key manner. Many ultra high-end properties also have a limited pool of buyers that doesn’t lend itself to an MLS.
Quite a number of agents promote their listings through private groups such as Top Agent Network, or solely within their own brokerages. The real estate community’s concern is that the practice of routinely holding back listings from the MLS and marketing them exclusively among a closed group of agents further exacerbates our limited San Francisco inventory issue. Just over 400 single-family homes, condos, TICs and two- to four-unit building listings have been reported sold in 0 days (e.g., off market) this year. But that represents only nine percent of all properties that sold after spending one or more days on the MLS.
It will be interesting to see how NAR’s off-market listing ban changes the way real estate runs in San Francisco next Spring. My guess is that we won’t have a sudden inventory surge. Homeowners who might have been willing to give it a shot off market at a buy-it-now price without staging, for example, won’t bother going the MLS route. Agents who heavily rely on touting their access to pocket listings to get buyer business may be forced to distinguish themselves in other ways.