What is the Private Listing Network in Winnetka & the North Shore
TWO THINGS HAPPENED
In 2018, our Northern Illinois Multiple Listing Service (MRED) introduced the “Private Listing Network” (PLN) to real estate agents.
Then, last November (2019) the National Association of Realtors banned the use of “pocket listings.”
WHAT IS A POCKET LISTING
First, what is a pocket listing and why is it problematic? A pocket listing (sometimes called an exempt listing) is an agreement between the home seller and real estate agent (more specifically, the brokerage) that the house will not be listed on the Multiple Listing Service (MLS,) but rather sold behind the scenes.
There are many reasons sellers might not want their homes publicly listed. They may have work to do on it, they may not be ready to move yet but want their agent to spread the word among other agents. High-profile sellers might request to keep their house private until it sells, avoiding public scrutiny.
All signed listing agreements must be entered into the MLS within 48 hours or the agent risks a fine. But if the seller is fully informed by the agent and signs the appropriate form, the agent can proceed without entering it into the MLS until a later date.
THE PROBLEMS WITH POCKET LISTINGS
If the agent suggests a pocket listing in order to secure a double commission by marketing and selling only to his own clients, that's a Code of Ethics issue. In other words, the agent is no longer acting in the best interests of the client.
Other issues can arise as well. From REALTOR Magazine:
“. . .assume brokerages in a high-end market have numerous pocket listings, which creates an aura of exclusivity for their business and attracts high-end clients. This also is not illegal or unethical by itself. Yet if the listings are kept off the MLS in order to boost the brokerage’s reputation, not to benefit the seller-clients, the result can be a violation.”
So pocket listings have a shady connotation because their use has often been exploited for personal gain.
THE START OF THE PRIVATE LISTING NETWORK
But that doesn’t mean they’re not a good thing and MRED decided, wisely I think, to introduce the Private network as a sort of holding area for these types of listings. When a listing is entered into the private network, it can be accessed by any agent who is a member.
But unlike regular MLS listings, the private listings are not exposed to the public and will not show up online on nationally syndicated sites. They are the ones that are marketed as “Coming Soon.”
It acually makes more sense to do this because of the above-mentioned 48-hour rule. Since there is so much legwork to be done to prepare a home for sale, it simply can’t be done in 48 hours. Agents advise their sellers to declutter, clean, paint, make necessary repairs, and stage. Plus we agents then need to schedule professional photography, order floor plans, and prepare marketing materials. Impossible to do in two days.
By having the signed listing agreement in the Private Network, sellers have adequate time to finish the necessary work and agents can confidently start their work with a signed agreement in place. When everything is ready, the listing is transitioned from the Private Network to the regular MLS where it can then be seen by the public. Some listings sell directly from the Private and are never marketed publicly.
WHERE WE ARE NOW
We now have a very busy and full Private Network in our local MLS. Many homes were removed from the market for the holidays at the seller’s request and these are often put into the Private Network. While this was not the intended use, it is not illegal to do so.
I recently did a comparison of homes for sale in each village between the MLS and the PLS.
You can see the number of homes in the Private Network is considerable. It’s important that buyers of North Shore homes are aware of this and ask their agents to check the PLN often.
Our MLS, called MRED (Midwest Real Estate Data) is one of the best. Their technology and customer service are phenomenal. I believe they are one of the first to offer a solution to the pocket listing debate that serves everybody well. And they did it more than a year before the ban by the National Association of Realtors was announced.
While you're here, please see ALL NORTH SHORE HOMES FOR SALE
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Margaret Goss is a full-time real estate broker since 1998 working in the North Shore communities of Winnetka, Wilmette, Kenilworth, Glencoe, Northfield, Glenview, and Evanston.
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