I just got off a one hour webinar presented by the California Assssociation of Realtors Legal Staff on the subject of 'Pocket Listings'. While pocket listings are legal if the proper procedures are followed, some agents simply are not. Agents who are not following the letter of the law will be coming under increasing scrutiny from the DRE and other regulators. That's what the rest of us need - more regulations to curb the avarice of a few. Ain't that the way it goes?
In Australia they call them 'Pouch Listings'.
Don't know what a Pocket Listing is? Here's the legal description: REALTORS® marketing a property for which they have obtained a listing will generally place that listing on the Multiple Listing Service (MLS). At times, however, listings are not placed into the MLS. Listings not placed on the MLS are commonly referred to as “pocket listings”. This article will discuss the various legal issues and risks of pocket listings. Please note that this article references the California Model Multiple Listing Services Rules (Amended February 2013). REALTORS®, however, must comply with their own local MLS rules. Many local MLSs adopt the Model MLS Rules in its entirety, whereas other MLSs may have slight variations and may have different numbering systems.
What is a pocket listing?
A pocket or off-MLS listing generally refers to a listing agreement that an agent has obtained but does not place on the MLS. A “pocket listing” is not a legally-defined term, and can have other meanings as discussed below.
Is a pocket listing legal?
Yes, a pocket listing can be legal. However, a pocket listing raises a number of legal and practical issues that agents should consider and address as discussed below.
For more information on 'Pocket Listings', the legality, the ethics, the fiduciary, get the answers from CAR Legal: