Hip Pocket Listings. Good, Bad, or just Plain Wrong?

Services for Real Estate Pros with Virtual Pictures Corp. (VPiX)

I got a phone call from one of my favorite Keller Williams agents in Texas this morning.  Apparently, NTREIS wants to implement a task force on policing the homes never getting into the MLS that sell quickly.  Apparently the scuttlebut or rumor control says they are forming a task force to take "aim" at agents with hip-pocket listings. 

In some hot markets, like Dallas, Park Cities, Plano and others -- ganted, there exists some "pockets" of fast moving neighborhoods. Chicago has some, So does my market in Colorado Springs and Denver. 

Let's assume Alice the Agent at Amazing Realty makes a listing presentation to a potential home seller somewhere in the Park Cities area, a coveted and highly desirable place to live in Dallas.

She discloses the benefits of the MLS and exposure with the standard listing syndication tool.

She also explains she might have a few potential buyers (in her hip pocket) already that are eager to move to Park Cities.  So she asks the listing if they want her to call them first, and avoid the stampede of calls and showings with unknown agents tromping through their home.

The home owner agrees and instructs the agent to proceed with the Agent's recommendation.  

Result: Alice the Agent brings an offer in 24 hours. No MLS # needed.  What's wrong with this?  Short answer: Nothing. 

But NTREIS seems to be hopping mad about the "hip-pocket listings," process, no doubt fueled by a handful of agents who seemed threatened by the smart ones that are working their butts off and enjoying life at the top of the real estate food chain.

I support innovation as anyone can clearly tell. I don't like to repackage the "statuq quo," and my company's mission statement is a simple one: We create disruption for fun and profit.  

Not too many years ago, I was one of the original founders of the Open MLS Consortium along with David Barry, Glenn Kelman (Redfin) and a few others that joined later. If you are unfamiliar with the work we did, click here and read what Blanche Evans reported on the story.

So it's no surprise, I salute smart agents who re-invent what we do to be of better service to the buyers and sellers we serve.

YES -- there are many distinct advantages for listing your property with the MLS. But for a growing number of homeowners, we have a dark side of listing with the MLS, too.

1.) Your local MLS syndicates to Realtor.com, then Trulia, then Zillow and countless others. Not all of them give full listing controls to the agent. 

One MLS organization -- MRIS went so far to claim ownership of the listings. You'd think that the broker owns the listing, right? Not if you're a broker using MRIS. This is 100% evil in my opinion. But since there's no other MLS choice there (not yet, but coming soon) local brokers are forced to use them. 

2.) Homes once sold, don't always get removed in a timely manner OFF the syndication sites. This can be a problem. Trulia and Zillow frequently show thousands more homes being on the market than there are really available.  There are complaints from new home buyers getting offers for their home months after they already moved in and took possession. 

3.) Some people do not want photos or virtual tours of their homes shown publicly for privacy reasons.

Maybe they have expensive works of art they don't want shown online. Maybe they are a celebrity and want discretion or a private sale. Maybe they don't want five million "looky-loos," tromping inside their homes for showings, either. As an agent, you have to respect the rights of your seller. 

Withholding a home from the MLS when the agent already has a buyer is simple "common sense."

The only one whining about this will be the lazy agent who feels they lost their chance at bat. Crying "foul," to NTREIS and creating gestapo-like task forces to force agents to use the MLS to publish the home listing regardless smacks of "restraint of fair trade."  If Alice the Agent has a buyer, the need for creating an MLS listing after the fact is rather academic. It's unnecessary. 

"Go ahead. Make my day," is what comes next with a lawsuit by the DOJ against NTREIS if they attempt to do anything this blatantly stupid. Restraint of fair trade is not a misdemeanor. It's a felony, people.  I have no clue what NTREIS is putting in their coffee besides Coffee Mate. But apparently, it's having an impact on their "common sense." 

The last time I checked, Agents can get their own websites. They choose which vendor to get their IDX tools from. They can choose what virtual tour company to work with, or they can shoot their own. It's a free country. So long as the agent ethically represents the buyer or seller, we have creative freedom to service our customers as best we can and we can pick our own vendors to work with. 

So it follows, forcing the agent to use NTREIS for all listings isn't going to be very popular when we already have an abundance of other, more innovative choices online. And more options and more innovation is underway to help technology-driven agents become more productive. 

If Alice the Agent sells a home in a hot Dallas market before it ever turns into an MLS number -- is there really a DOWN side?

Let's review:  

1.) The home owner is doing cart wheels as they sold their home quickly. 

2.) The agents make their commissions. 

3.) The broker gets their slice of the pie. 

4.) The happy new owners take possession and move in.

Everybody is happy. 

Except the local MLS (NTREIS).  ( Where's my violin? ) 

Sir Winston Churchill said, "Those who do not remember the past are doomed to repeat it."

Let me remind a few forgetful agents as to what happened in 2004. 

NAR was sued over restriction of data and policies that thwarted innovation from discount brokerage models (among other things). Forced trade membership in NAR was then being practiced as it still is today at many MLS organizations. 

While the DOJ-NAR lawsuit is long over now, shady business practices still continue today. For example, Realtor.com says you cannot publish a FSBO for sale. But you can if you place $300 or so bucks into the hands of an agent, they'll be happy to "ghost list," it for you. We've invented new terms for this practice by calling them "Flat Fee MLS," listings. 

Anyone can see the MLS is broken and I'm not the only one sick and tired of the "good old boy" MLS cartel and an out-dated system that's been sacrosanct for more than 50 years.

Apparently so was Jim Abbott of Abbott Realty Group in San Diego. If you have not seen his video, you really need to. Click here.

ARG pulled out of Trulia, Zillow and Realtor.com in January 2012. 

Shock. Gasp! Did he really do that? Yes he did.

Did we need Realtor.com, Trulia or Zillow to begin with? Apparently not. Their brokerage is still alive and thriving without the accepted MLS tools of the trade. 

Edina Realty soon followed. And there are more brokerages out there that have said "enough," with the local MLS Gestapo. 

Let me leave you with a prophecy of what's coming next, because change is coming to the MLS whether we like it or not.

In late August or early September, a new company surfaces their submarine. 

It's been running deep and silent for nearly ten years. 

When they surface and pop open their hatch, they will be spinning up missile silos 1 through 12. (metaphorically speaking) 

NTREIS is one of the first targets being programmed into their firing sequence. Followed by MRIS and three more (I am told). 

The funny thing about this is that brokers are willing and eager to turn the launch keys for these new WMD's (Weapons of MLS Destruction). 

Brokers and agents want control of their own listings, their own leads and want to control their own destiny, and who can blame them?  

Very soon, the local MLS will start to have real, serious competition.  

And all I can say is it's about damned time. 

Posted by

Bart Wilson | CIO
Virtual Pictures Corp (VPiX®)  
iPhone: (719) 645-9940  |  Skype:  vpix360 


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Ralph Janisch ABR CRS Broker
Janisch & Co. - Conroe, TX
Selling Northwest Houston to good people like you!
I have to agree that the time has come! Associations and related MLS have all become bloated and overbearing in my opinion.
Jun 06, 2013 12:21 PM #1
Sussie Sutton
UTR Texas Realtors - Pearland, TX
UTR TEXAS Realtors - Rep for buyers and sellers.

Great post we have our own MLS  issues too.

Jun 06, 2013 01:55 PM #2
John Mosier
Realty ONE Group Mountain Desert - Prescott, AZ
Prescott's Patriot Agent 928 533-8142

Thanks for your post, Bart.  

I have over 40 listings of "cheap" recreational properties in an area that I dominate. I have been putting all my listings into the MLS but I have lately realized that I do not need to do that. I sell over 90 % of my own listings.

I just realized I can do more of that without the MLS!

I spend much of my time re-educating my potential Buyers who got the wrong and incomplete information from Realtor.com, Trulia, Landwatch or Zillow. If I can save the time I spend this way, I can sell more of my own listings and come out ahead.

I will be adjusting my listing presentation in order to promote pocket listings.

Jun 06, 2013 05:08 PM #3
Lenn Harley
Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA
Real Estate Broker - Virginia & Maryland

You wrote:  "MRIS went so far to claim ownership of the listings. You'd think that the broker owns the listing, right?"

This matter has been litigated.  The listing broker owns the listing.  The MLS owns the LISTING REPORT generated by the system when the data is entered by the listing broker/agent.  

The LISTING is a tangible representation of a contract between the broker and the owner.

The LISTING REPORT is merely a report generated by the listing data.

Experience has shown me that most agents take "pocket listings" in an effort to avoid paying the co-op.  Not a problem.  If a seller wants to limit exposure fine.  Anecdotal evidence of a few examples is not persuading when compared with the sales results of MLS listed properties.

All said, if a home owner wants to take a chance without MLS listing, fine.  It's just one home that agents working with buyer won't be able to sell. 

Jun 06, 2013 08:59 PM #4
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