This article was also published on Inman.
With NAR’s new pocket-listing policy, brokers can, with the seller’s consent, withhold listings from public view on real estate websites. The new rule requires that the listings be shared with other brokers, via local Multiple Listing Services. This means that, as a broker that also runs a large real estate site, we’ll be able to tell our buyers about these listings. But it would be much better for consumers if everyone could see all the homes for sale on all the real estate sites. We’ll talk about how to do that while still giving sellers control over their listing, but let’s start by discussing the NAR’s new policy.
The NAR Policies Will Confuse Consumers
The problem is that the NAR’s position on pocket listings is a mess, for two reasons. First, the new policy exists alongside its predecessor, which lets a broker keep a listing entirely to itself, albeit with other limits. Second, NAR policies are high-level guidelines that each local MLS may interpret differently. For consumers, the result will just be confusion. Because home-owners will demand broad exposure for their listing, we still believe the vast majority of listings will be published online, on sites like Redfin.com, Zillow.com and Realtor.com, but this will now happen despite the NAR, not because of it.
This Is Pocket Listings By Another Name
The new policy is being framed as “delayed marketing,” but it is pocket listings by another name: the duration of the delay hasn’t been specified, and many listings will accept an offer without ever being publicly marketed. In at least some of those cases, the seller could’ve gotten a higher price via broader exposure, and many homebuyers will wonder why they never saw the home for sale.
The Good News: Every Broker Can Access the Listings
What’s good about the delayed-marketing policy is that any homebuyer, regardless of the broker she hires, will be able to find out about these homes through her broker. This is better than the longstanding policy of office exclusives, which some brokers will still use to market their listings exclusively to the buyers working with that broker. We expect many brokers will prefer delayed-marketing listings, just because that option, unlike office exclusives, lets the listing be displayed on the broker’s own site.
The Bad News: You May Have to Hire a Broker to See the Listings
What’s bad about even the delayed-marketing listings is that homebuyers may still have to hire a broker to be able to see all the homes for sale. For our entire history, Redfin has upheld one bedrock principle: you shouldn’t have to engage a broker to see all the homes for sale, or even to buy one. The only reason people should hire us is because they value our service.
In Theory, Online Access to Pocket Listings; In Practice, It’s Up to Local MLSs
On the key point of self-service access, the NAR policy is promising but still ambiguous. The delayed-marketing policy says that MLSs have the option to make delayed-marketing listings available online to website users who register as brokerage customers, but some MLSs may choose not to do so. If the MLSs don’t even show delayed-marketing listings to the serious home-buyers on the sites run by Redfin and by other companies actively participating in the market, then the industry will have completely regressed: the whole reason the Department of Justice sued the NAR in 2005 was to ensure that every broker and its customers had equal, online access to listing data.
Show All the Homes for Sale, But Give Sellers Control Over How They Appear
The tragedy is that there’s a much better solution to the problem pocket listings seek to address, which is that home-owners want exposure on sites like Redfin.com, but also more control over how our site presents their listings. Instead of hiding the listing from buyers, why not show it to everyone from the day it debuts, but with options for sellers to suppress days-on-market, AI-driven price estimates, or the price history?
Redfin Can’t Solve This Problem On Our Own
Admittedly this is a departure from the position we took some 20 years ago, but Redfin would prefer that all consumers know the listing exists, even if that means that we don’t show how long the listing has been for sale. On our own, we could give sellers the ability to control how our site markets their listing, but that wouldn’t solve the problem on Zillow.com or Realtor.com.
This Is Why We Need an MLS
And this is why the NAR and MLSs exist, to do what no single site can do on its own: facilitating a marketplace balanced between how sellers want to market their listings and how buyers want to search for them. Rather than intentionally fragmenting the marketplace, with listings appearing in different places under different policies, we should show all the listings in one place, with different sellers allowing different levels of disclosure on each listing. In this way, we can finally stop forcing home-owners to make a terrible and false choice: between how the listing is marketed, and how many people the listing is marketed to.
We’ll Play By the Rules, But Let’s Make Better Rules
One final point, which we have made many times before: after years of holding out, Redfin is finally becoming more aggressive about pocketing listings, despite our fierce advocacy for rules banning pocket listings. Other brokers may call this hypocrisy, but it isn’t hypocrisy to play by the rules while wanting better rules. You can, for example, be in favor of a rule that requires soccer players not to pick up the ball, but if the referee stops enforcing that rule — and really, why else would you even have the referee — then every team has to play soccer as if it were rugby. No one can expect Redfin to share listings with brokers who hoard listings, especially when Redfin runs the largest brokerage site in America. Pocketing listings may turn out to be a winning strategy for Redfin, but over time it’s a losing one for our industry.
Written by: Glenn Kelman