UPDATE (April 25): Office Exclusive Changes Finalized
RMLS™ has finalized changes to office exclusive policies, effective May 5, 2014.
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UPDATE (February 28): Office Exclusive Changes to be Delayed
A significant number of questions were raised when we outlined changes to the office exclusive form, rules, and contracts. RMLS™ will be delaying the release of these changes until we can work through these concerns and clarify details. If you have a comment, please email communications@rmls.com. We anticipate this process will be worked out by the end of March.
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There has recently been a lot of national buzz about pocket listings. The RMLS™ Board of Directors and Rules Committee received several inquiries over the past year about the practice, and how pocket listings affect our own real estate community. So at the November 2013 meeting of the Board of Directors, the Office Exclusive Task Force was appointed to evaluate the issue of office exclusives and pocket listings.
The Office Exclusive Task Force was comprised of five members of the RMLS™ Board of Directors: Mark Meek (Task Force Chairman), Rick Jenkins (Chairman of the Rules and Regulations Committee), Ed Petrossian, George Perkins, and Steve Lucas. They looked at and discussed our current policies and rules regarding Office Exclusive listings and various interpretations among subscribers about List Date and Date Marketing to Begin.
Their recommendations were presented to the RMLS™ Board of Directors at their February 2014 meeting. The recommendations were approved and will take effect March 3, 2014. Three documents are affected:
- The Office Exclusive Addendum (Authorization to Exclude) form has been totally revamped. This form will be required when a seller elects to opt out of placing their property in RMLS™ along with a copy of the Listing Agreement. This new form informs the seller(s) of the risks of excluding their property from the multiple listing service (MLS).
- The RMLS™ Rules and Regulations were modified to define marketing and clarify the difference between the effective date of a listing, when all the necessary signatures have been obtained, and the Date Marketing to Begin which can be a later date. Also, a new sanction was added for marketing of a property prior to publication in RMLS™.
- The Listing Contract language for Oregon and Washington was changed to be in harmony with the changes to the RMLS™ Rules and Regulations.
The Office Exclusive Addendum will now cover all the benefits of MLS publication so that the seller is fully informed. Some of the concepts include the wide distribution of property information to more than 10,500 other real estate brokers who subscribe to RMLS™, bringing together buyers and sellers in an efficient marketplace. RMLS™ subscribers are REALTORS® who abide by the NAR Code of Ethics. Cooperation among brokers from many brokerage firms, by including the listing in the MLS, increases a seller’s chances of identifying a qualified buyer and obtaining fair market value for the property. It also helps provide a rich database in which subscribers can identify comparable properties for CMA reports and valuable statistical information.
I am sorry but none of the links are working in this release. I have tried Chrome and IE and no luck. Maybe fix this and check to see it is working before you republish.
Thank you.
Dirk
Our apologies, the links are working now.
When will the revised listing contract be available in RMLS and ZipForms?
Hello Ken, The revised listing contracts will be available on RMLSweb early next week. We are working with ZipLogix to get an ETA. We will post a message on RMLSweb once they become available.
This is a good addendum to inform Sellers and promote cooperation among agents. The practice of “in-house” sales, never posted on the MLS, can miss potential buyers / multiple offers that drive up the price for the Seller. If a listing agent has an offer in hand at lease post the listing immediately for a day or two to see if there are other fish swimming in the sea. I once had a sale that the Seller could have accepted an FSBO offer for $145K but we published the listing and received $310K! Another situation where the Seller could have conveniently accepted an offer before the listing was posted but we published it on the RMLS and received an offer that was $20,000 higher! Not posting the listing can leave significant money money on the table, which is not in the Seller’s best interests. I practice posting all listings because advertising exposure reaches all potential Buyers and also promotes the value of our services. Any wonder why these clients have given me repeat and referral business? Do you really want the liability of leaving money on the table?
Love these changes, thank you!
Good Job, very frustrating for a Realtor that has a buyer but has to wait until they run it thru there own office, I lost a dozen sales last year because there was no policy!!!!!
Sounds good, I’m with Brad. I hated when some realtors post a listing and with a day is pending. Figure they had a buyer in-house, isn’t fair for other buyers…
Tightening this rule was certainly one of the possible options available to this task force and to the RMLS board.
But why was this practice, so clearly inimical to the interest of any seller, not flatly prohibited?
Do we have some big brokerage(s) that embrace this practice and have threatened to depart the multiple if not allowed to continue it?
What other possible justification for allowing the continuation of this uncooperative practice was argued within the meetings of the task force or board?
I, on the other hand, do not like this rule change. Any rule that impinges on our freedom to market a home however we see fit with the consent of our clients is unnecessary. If we want to address the issue of pre-listing marketing it could be handled by a few simple lines in the listing agreement wherein a seller could chose to allow pre-listing marketing and/or private listing prior to public publishing on RMLS.
While I rarely engage in marketing prior to listing on RMLS I think this impinges on our ability to do the best for our clients. Do you realize that by this rule you cannot announce an upcoming listing at your weekly office meeting without facing the possibility of sanctions? Or if you have a unique property where there are no or very few comparable properties you may not be permitted to invite four or five co-workers to tour and give an opinion of value because it is still a pre-listing tour and a potential violation of this rule. Or how about the clients who don’t quite have their home ready to for public showings but who have identified a replacement property and want to start marketing to try to generate as much interest as possible for when their home is listed; this too would be a violation.
Right now the inventory is low and like many of us I have some frustrated buyers not only trying to find homes that fit their needs but struggling to be competitive in this extremely active market. I agree that it is in the best interests of most sellers to have their home publicly listed on RMLS but 5-6 years ago when we have tons of inventory and few buyers I can see where pre-listing marketing could be advantageous.
Furthermore, I object to the language of the Office Exclusive form. In presenting that to a client it is written in such a way that they might feel foolish to agree. The word choice is highly negative and it fails to acknowledge that there may be some advantages to a “pocket listing” or marketing prior to listing. For example, the clients who have a high-end home with expensive art that want agent accompanied showings only. In this case the seller and the listing agent would want the best qualified potential buyers so they might want an office exclusive listing initially so that the home is marketed to other agents, not just those in their office, who work in that area or price range. That is not to say that there might not be other qualified buyers that wouldn’t be reached by such marketing but we all know of neighborhood where certain agents dominate the market. Some sellers just aren’t prepared for the disruption to their lives and the language of the form may call into question the honesty of their broker.
Taken in combination I think this rule change and addition paperwork are poorly considered. They are unlikely to help my business and will only create more work for me in the future to ensure compliance. While I would not claim that things are ideal as they currently stand this is not a step forward.
The seller ought to “feel foolish” in agreeing to withhold their listing from the entire multiple. It is never, but never, in their interest to do so.
One of your arguments is that some seller might want to limit the exposure of their home to “other agents, not just those in their office, who work in that area or price range”. Other agents? Selected (fairly or unfairly?) by the lister?
Let’s suppose the lister in question has perfect knowledge of who has ever “worked” that area or price range in the past. That is no indication of future performance by agents who have not.
You say , “Some sellers just aren’t prepared for the disruption to their lives” that might be caused by exposing their listing to all the potential qualified buyers that might be interested. Admittedly, there are sellers whose vanity gets in the way of their economic interest. And, admittedly, there are probably some agents out there more ready and able to take advantage of that vanity than others.
But it is inimical to the interest of any and all sellers to limit the exposure of their listing to some subset of the whole multiple – whether that is a subset we call an office or a brokerage or a few agents on some proud agent’s email list of favored agents or simply a few others sharing a cup at Starbucks.
How about if we just all, always, put our listings out there for every buyer…even those being represented by agents we neither know or like?
The new form language may cure the worst abuses of this practice. But the RMLS would have done well to completely prohibit it.
I agree with Jim Hale!
Pocket Listings were never sanctioned by firms I worked for; yet it was common knowledge that there were agents and companies that operated outside this rule. RMLS has always known of this practice and has looked the other way; yet a simple perusal of 0-Day or 1-Day sale inputs would surely have been a tell-tale sign that POCKET LISTING SALES existed!
Oregon is supposedly a BUYER BEWARE State; yet the Seller should also be made aware of marketing practices that can hurt them financially. SELLERS will never get full exposure to the market when they are manipulated into trusting an agent and their company that apply this tool. No wonder Appraisers have a difficult time arriving at market value, when the highest value may never be offered by a competing bidder. All ABLE and WILLING BUYERS deserve the opportunity to make an offer on new listings! Sellers have enough anxiety waiting for a Buyer to perform and qualify and close; without second guessing about a Better Buyer with a Better Price that never got a chance to be considered!!!!!!
Mixed emotions on this one. I understand how all the benefits of full MLS input should be disclosed to the seller, and that without knowledge they might be at the mercy of a broker who doesnt price correctly or underprices on purpose to insure a sale, etc but the sellers can also do due diligence in the internet.
I fully agree with Jeffrey about rights. How far down does the lid have to be tightened? The wording sounds self serving. I like the idea of the form but would re-word it to neutral. We never want a client to think that EVERYTHING we do in the name of fairness, practices, etc is tied to profit
Thank you so much for these excellent changes. This was a long time coming. Good work Task Force!
I have mixed feelings on this. Since the beginning of time, Realtors have chatted with each other about their upcoming listings and buyer clients. Those conversations get us thinking, often result in at least connections being made, and can play a role in motivating a seller to get their property ready for market sooner than later. These rules effectively shut down Realtor to Realtor casual conversations, if there is any signed paperwork.
In addition, there are a variety of sellers for whom a barrage of lookers and offers may not be appropriate; the little old lady, a tenant occupied property, hard to show properties etc. Sellers may want to knowingly avoid an onslaught. Pre-marketing can often help give the property some exposure, and if it doesn’t result in an acceptable offer, the listing then goes live. We’ll have to approach these situations differently.
I am with a big company and we have taken pride in our agents putting together transactions agent to agent. Most of those aren’t about keeping it away from other agents. They are a result of networking; literally walking the halls asking other agents if they have a certain type of property coming on the horizon. If a property isn’t actually listed yet, these conversations won’t be in violation of the new rules. We’ll all have to be careful once paperwork is signed.
Sorry, Leslie. I hate to drone on here. But…
There is nothing stopping the agents of “a big company” from doing all that positive networking that you suggest – after the listing has been appropriately put into the MLS.
All that internal networking is helping the seller get the home sold – whenever it takes place. If the agents of a large company want to do that after the listing “goes live” they should knock themselves out.
No one could possibly object to that.
But when that networking takes place before the listing hits the multiple, it has one rather obvious additional intent and one very clear, highly objectionable effect. It’s intent is to make the sale an in-company sale. And its effect is the foreclosing of timely outside efforts on behalf of the sale of the listing. The intent is merely unfair to other agents outside the listing brokerage. The effect is directly harmful to the seller’s interest – a failure to bring the full market to to bear to sell the property.
For example. Let’s say a big company comprises 10% of local agents. Internal marketing exposes the property to that company’s share of all buyers. Let’s say that brokerage’s agents are above average and manage to work with 20% of all potential buyers. A pre-multiple, internal sale means the listing has not been exposed to a full 80% of the possible buyers.
How is that ever in the seller’s interest? Even if the listing agency were a near monopoly?
Some sellers don’t want a “barrage” of showings? Then put it in the MLS with a requirement for pre-qual letters prior to showings. Give EVERYONE in the serious market a serious shot. And equal shot. A shot that get’s the SELLER the best shot at the best price…..not just the Lister the best shot at a double-sided deal and the Listing Brokerage the best shot at an in-house commission.
The listing agent (or brokerage) and the seller NEVER have identical interests….though some like to think and act as if it were so.
I can’t imagine going to a seller and seeking their permission to restrict the market exposure to a subset of the market. I can’t imagine doing so without their clear eyed permission.
But I get the impression that it must go on all the time.
Such hubris should not be a part of this occupation.
Maybe its presence is why so few feel this is a profession.
Oh, I don’t think that networking only happens “in house” .Plenty of agents socialize with other agents from other companies ,and can’t help but talk about what they are working on. And I think there are small, neighborhood offices who try to give the impression they control a neighborhood, and know what is coming on the market before it actually does, so it isn’t just a large office thing.
I too get frustrated at seeing things go pending that my buyer clients didn’t even have a chance at, but I usually kick myself for not networking better. Guess I’ll be off the hook now.
I do wonder that we’ll see an increase in one party listings.
Leslie – You will see an increase in one-party listings, but that is because the inventory is so low that going out and finding something not now on the market is sometimes necessary.
As I read this rule, use of the newly reworded form will be required for all one-party listings.
The new form can be read a couple of different ways. I hope we all interpret it the same way.
I totally agree with you, Jim.
Have you considered the situation where the listing agent has tiered pricing and offers much reduced list cost when there is no buying agent thus saving the sellers money and when the price offered is the highest the property will appraise for?
You hit the nail on the head Leslie! This business is about customer service and any restraint on our ability to market properties in the best interests of our clients is potentially problematic. Yes, it can still be done with additional paperwork executed but that paperwork appears to be specifically designed to discourage sellers from allowing us to use our connections to cultivate the highest levels of interest in their homes. Those of us with strong connections in our business community don’t try to keep properties from others, to the contrary, we want as many people to know about these properties and marketing prior to publication on RMLS may help to achieve that very goal. That doesn’t mean that we have to review and accept offers prior to publication, in fact we can explicitly state that the seller will not allow viewings prior to publication so as to allow as many potential buyers as possible have a chance to see the property. I don’t see how this rule change protects our clients nor do I think it is the best interest of Oregon real estate brokers. We work hard to cultivate a positive reputation and establish our networks of contacts and this would limit part of our individual appeal to our clients.
As RMLS members we have all agreed to enter our listings into the system within a short time frame. This isn’t new. In light of what has been happening some MLS’s have even banned Office Exclusives altogether. The RMLS Board sought a more moderate approach. These new changes only hope to insure there is a conversation between Brokers & Clients and that Clients are aware of what it means to not have their property in the MLS before they make the decision to exclude it.
This has been a topic of National attention. Copy and paste the link below into your browser.
http://realtormag.realtor.org/news-and-commentary/commentary/article/2013/11/mls-base
Indeed. And I think the most egregious are listing agents who hold a listing out of the MLS in an effort to sell I themselves. I, as professional policy, don’t practice dual agency, and think those who do act as dual agents walk a very fine line.
Disclosed limited agency is not without risk. But, at least in Lane County, it appears to be more common with high dollar homes.
It is that frequency that demands this rule. It is likely that frequency which evokes the strongest opposition to this rule.
Acting on both sides of the sale, when the listing has not yet been in the MLS but when that was the seller’s ultimate intent – now, that would be a problem.
George – Thanks for the link. The article presents a spot on argument. And the comments mirror those here.
The commercial exception to the new RMLS rule is probably warranted.
I would agree with Jim Hale. Any restriction to marketing a home is not in the seller’s interest. Dual Agency is generally not in the seller’s best interest either. Although our ethics classes clearly state our clients come first, selling before a home is listed on the MLS could only benefit the large Real Estate companies and their agents. I am with Paris Group Realty, we are a small company, so my clients are at a disadvantage when homes are not listed on the RMLS. Dual Agency should be eliminated as well, I dont see this as ethical in any situation.
Thank you task force. I think it is an improvement. It levels the field in a way that makes it more fair to the buyers out there.
If the “Office Exclusive Addendum Form” dated v3.2014 is what is going to take effect 3 Mar 14, then paragraph 2. requires submission of “signed listing agreements” to RMLS within 72 hours (or, if later, the date specified for marketing to begin).
Doesn’t this mean that unless one has a signed listing agreement the Office Exclusive Addendum never is potentially triggered? Nothing here seems to preclude an agent from talking about an upcoming listing in network groups or in the hallways in an informal way to generate interest prior to getting a listing signed.
Or am I wrong.
Jeff, you are correct. Unless there is a signed Listing Agreement there would be no need for an Office Exclusive Addendum form.
Hi there. I think there are two important issues here. I’m responding to George who states that we all agree to enter our listings into RMLS within a short time frame. In my experience, that is not something to which I or my clients agree. I think that first and foremost, the listing contract is a service contract. It is an employment contract where by a seller hires a real estate principal broker to sell his/her property. It can take months and months to get a property ready to sell and as a full service realtor, I am very involved in helping many of my clients prepare their properties for the market. It is important to me that I have a clearly defined service contract with my clients prior to contributing my time and expertise. For me, this means that there are usually weeks (at the very least) and sometimes even months between the listing date and the marketing date. I completely agree that there abuses in the system as is, and I’m glad that an attempt is being made at ensuring full disclosure to our seller clients about their options. And that’s all this really is, it’s a way to try and ensure that a conversation, that we all should be having with our clients anyway, is being had with all of our clients. Your client can still make the choice to try and sell without listing on RMLS, or with marketing prior to going active on RMLS, but yes you now need to prove that explained to your client the pros and cons of making that choice. Yes, you now need to prove that you have acted as a fiduciary to your client (i.e. YOUR JOB). It’s important to me that I have the right to be treated as a professional and to ask my clients to sign a service contract with me before I commit my time and my expertise to their listing preparation, but it’s also our duty to explain to our clients the ramifications of the decisions they are making. Is this really such a big deal? Startling news? Yes, you need to have important conversations with your clients about the pros and cons of the decisions they will be making when they hire you as their agent.
I’m not sure all the people “excited” about these changes grasp how it really changes the way we can market listings, therefore impacting the level of service we can provide to our selling clients.
Here is the text of the major change in section 3.2:
“All listing contracts shall set forth the date that marketing is to begin.
Marketing includes, but is not limited to, placing any yard sign, social
media or internet exposure, broker tours and direct marketing to any
real estate professionals or consumers.
If the date that marketing is to begin is more than 72 hours after the
effective date of the Listing Agreement, entry into RMLS™ must occur
on that date, but no other marketing can commence prior to that date.”
Our office provides full-service marketing, including doing “sneak peeks” for neighbors – which we send out postcards before the listing goes live. Also, when we order the signposts, it can take anywhere from a few days up to almost 2 weeks. That is something we have no control over, and now if a sign post is in “early” we can get fined $1000!
These new changes are ludicrous and not necessary. They are making a change that negatively impacts everyone, instead of just going after the “bad apples”.
Doing “sneak peeks” for neighbors or anyone else has long been a violation of RMLS rules – if those peeks took place more than 72 hours before the listing went “live” in the system – or before the “date marketing is to begin”.
Similarly, putting up a sign more than 72 hours in advance of the listing going live has long been a rule violation.
It has long been one thing to take a listing, identifying a date that marketing is to begin, and then using the intervening time for the seller to get the home ready for sale or for the agent to get full promotional materials together – so as, for example, to get the RMLS maximum number of photos in hand, to fine tune your public and private remarks, get adverting text written, etc.
It has long been another thing entirely to put up a sign, hold an open house, and do showings from sign calls – or otherwise market the home – prior to either the “date marketing is to begin” or before 72 hours before putting the listing in multiple.
That some companies appear to have been routinely violating the old rule – either out of confusion or impure intent – strongly suggests the need for the new, more concise rule.
I have a listing coming up in two weeks and wanted first, BEFORE posting live on the RMLS, to hold a Broker’s open. The Brokers being notified by 500 plus emails in or near that zip code. I have that data base – opt in emails from almost all brokerages in the subject zip code. Plus, the Reverse Prospecting tool on the RMLS.
The purpose for that is to get enough input so when the Listing hits live on the RMLS it will be as near perfect in price, remarks, and any cosmetic improvements that are gathered from Broker comments.
I’m capable of advising my client about all of this, but am also capable enough to value input from other experienced professionals. The first two weeks are critical and I want to get this property sold at list price within that time.
What am I doing wrong? Or what do I need to do to stay within the rules? I’m not looking to complain or criticize – just want to do my work and not get into any issues.
Hi Ken, If I understand the scenario correctly, having a broker’s open and sending emails before the listing is published in the MLS would be a violation of the rules. Perhaps I am missing something, and other working practitioners would have more insight.
Yes, thought about it later, after posting, and see how to work this.
Thank you for your reply however. You all do a fantastic job and it is appreciated.
A significant number of questions were raised when we outlined changes to the office exclusive form, rules, and contracts. RMLS™ will be delaying the release of these changes until we can work through these concerns and clarify details. If you have a comment, please email communications@rmls.com.
We have had several questions regarding the reasons for the delay of implementation of these changes. In addition to the great comments on this blog, and questions addressed to our Data Accuracy staff, a meeting sponsored by PMAR and focused on pocket listings was held last week with about 50 Participant Brokers. The changes, which were scheduled to be released the following Monday, were a large focus of discussion. The two primary issues for Participants were a) submission of the listing agreement with the Office Exclusive form and b) being able to informally discuss upcoming listings with fellow Realtors®. Most Participants at the PMAR Broker/Owner Forum seemed to feel that the rule should allow for this type of discussion. With so many questions we decided to delay for a month so that the Board could consider these points. In general the Office Exclusive form and the concept of the rule changes were well received. We are collecting feedback at communications@rmls.com for the Board’s consideration at their next meeting.
Here’s my WIN-WIN-WIN scenario…
Pre-market all you want, but don’t accept an offer before a particular date. Let’s go further and say “No offers can be accepted until the property has been on the MLS for at least X # of days.”
Here’s why this would be a WIN-WIN-WIN….
Sellers get FULL market exposure – the best price & terms.
Buyers have plenty of time to shop — no missing out on their dream home or having to skip out of work.
Agents have more flexibility and can pre-plan shopping trips and offer presentations – no more missing out family events.
That’s my 2 cents!
Jennifer Karandy
Jennifer, my sentiments exactly. I am a small, one-person brokerage, but years ago worked in a larger office. I think having a 3-day rule would solve the problem. Some buyers may walk in the face of this and that is a risk. However, it could help generate even more qualified offers for the seller. Something to think about.
Nancy Allin, Principal Broker
NW Property Lynx