I’ve seen a number of things over the years but the latest one has me scratching my head. We have a specialized little subdivision in the area and a couple of agents from one of the larger brokerages have a corner on the listing market. I don’t have a problem with them cornering the listing market but what they’ve done next just seems wrong.
I was searching for properties in the subdivision and there were none in the MLS. I have an interested client so I drove through the neighborhood and found plenty of signs. I jotted down a couple of the addresses and tried to pull them up in the MLS…nothing.
I called the listing agent and asked for the details and showing instructions. I was told that the properties were non-MLS listings and only she can sell them. I asked about registering my client and then showing the home…”No…only I can sell those listings.” I asked about a referral fee for sending her my buyer…”No referral fees…your buyer will eventually call me directly.”
Why would any seller list a property and agree to keep it out of the MLS nor allow one of the 15,000 REALTORS® in the area to show and sell it? It makes no sense except for the listing agents and their brokerage. But are they really doing the best for their clients? I’d argue that the lack of competition actually creates lower prices and longer selling times.
If you’re listing your home, talk to the listing agent or read your contract to see if they will be placing the home in the MLS and to be aware of what they are offering to cooperating brokers.
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Source: http://www.thebranchteam.com/wordpress/2011/02/19/those-are-non-mls-listings-and-only-we-can-sell-them/
Tom Branch and Gina Branch, The Branch Team with RE/MAX Dallas Suburbs, service the greater North Dallas suburbs including Dallas, Plano, Allen, McKinney, Frisco, Lewisville, and Carrollton. While Gina concentrates on traditional listings and buyer/tenant representation, Tom specializes in assisting distressed homeowners to avoid foreclosure. Tom and Gina have published two books (Achieving Rock Star Status and The Field Guide to Short Sales) and are available for speaking engagements in the greater Dallas - Fort Worth Metroplex. Subscribe to The Branch Team Blog.
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Maybe they own the homes? As we all know exposure sells homes and gets a higher price too.
WOW, Tom and what kind of agents are these?????
What in the world are the sellers drinking to make them think this is a great plan by their agent? Holy Cow! Insanity, if you ask me. I would stalk that neighborhood and wait for signs to come down when they don't sell, then POUNCE on them. Better yet, why not send out a letter letting the homeowners know you have a buyer?
I'm scratching my head right along with you. I don't like this agent, lol.
I agree with the comment #1 left. Maybe they do own the homes!
Patricia/seacoast NH & ME
I know what I would do. The same thing I always do when I have a buyer that has a preference to buy into a particular community.
I drive them through the community, let them select the homes that interest them from the outside and then send a letter to each of those home owners. My letter lets them know that we are not soliciting a listing. It states that we have a pre-approved home buyer who is seeking a home in that wonderful community. I offer to handle the sale for a total fee of XX% which is going to be lower than most listing fees and invite them to contact me if they plan to sell within the next 6 months.
If they respond, I visit the home, help the seller, through competitive market analysis, to price their home. I also provide them with a written disclosure that I represent the buyer. I then show the ones that meet my buyers criteris, BR, BA, etc. to the buyer. This often generates a few homes that rise above the rest, we make an offer and take it from there.
This has generated several sales for me over the years. When the adventure ends, you have left that community with a lot of name recognition which often generates contact later on and opportunities to list. In my case, since I don't list, I make a referral to a trusted local listing agent.
This is win, win.
If you receive a contact from the agent who believes that they own that community, fine. You have not violated any rules or laws. Nothing to talk about. Of course, you have to follow the MLS rules for selecting the names for the letters. They must be randomly selected so you're not targeting any active listings.
Lori,
Nope...just making sure they get both sides by locking out everybody else...
Tom
Tom - I'm not even sure if the sellers know what's going on. SERIOUSLY. Many of them can be mold just as we want them to be.
That is crazy! Shame on that agent for not cooperating with agents!
I think you make some excellent points. If someone is going to have a pocket listing they should at least allow you to bring a buyer and give them the normal commission you pay to a buyer's agent. I can understand pulling a property off the MLS for a little while to give it a rest but you should still pay a cooperating commission to any agent who brings a buyer.
Wow! That is crazy and I would be willing to bet that the sellers have no idea what they have really agreed to! I cannot imagine what they have or haven't been told, but it smells fishy to me!
I'm sure there is a reason the homeowners feel that the agent can find a buyer without the assistance of any cooperating brokers. Are the listing agents members of the local MLS? If not then the properties wouldn't be in the MLS and of course the COE is off the table for them to potentially poach your clients as well.
We've had MLS listings in an area (parts of the Hamptons) where this behavior is the norm (no MLS entries). Hardest thing we ever did was to permit cooperation to benefit a non-MLS agent after the nonsense pulled by those in the area, but the seller got $200k over the asking price, so behaving in "like" would have reduced us to the low level of ethics that is pervasive in areas that perpetuate this behavior. Makes us all look bad.
Cindy #11,
The agents are REALTORS(R) but our listing agreements allow for non-MLS listings.
Most likely the sellers are unaware.
Tom
Tom:
There are agents in an adjacent city who do just what you're talking about. They live in and sell the subdivision exclusively and no one seems to mind. I agree that the home would get more exposure by being on the MLS, but the owners choose to continue listing with the broker exclusively, so what can you do? I sold one home in the area because the owner was out of town. When she spoke the the agent she felt he was being pushy and not helpful to her. He kept telling her that he sold all the homes in that area. She didn't believe him and we sold her house in a relative quick time for a very good price without the other agent.
We have a builder in our area who has a listing agent who is doing the same thing, they told a rel;ative of mine who i was their buyer broker that not only diod they have to buy through them without me that they had to list their house as well to be able to buy in that neighborhood, im waiting tio see what teh re commission says...
Tom,
In this market that could seem as a bold move. I do not thhink it is illegal, but it sure is unpleasant.
Now, here is a question. If it is not in MLS, so the commission is nowhere posted. So, you can present the offer to the Seller either through the agent or demand that you do it in the agent's presence, and in the offer you put your compensation.
The agent has to present the offer or risk losing a license. And you can, I think, demand that the Seller actually says that the Seller will not pay any commission.
If the Sellers do not kow that, they will not be happy with their Listing agents. Even if this is done with their agreeing to it, when they see the offer on the table, they may say that they want to sell, and would push the agent to cooperate.
Tom, you can also use it to get listings in the subdivision, explaining to them that while no other agent puts it on MLS, you will, and you will have 15K agents working for you.
I would not be surprised that you would eventually thank them for the business, that they heled you generate.
It seems to me if they are members of the local Multiple Listing service, they would be in violation of the MLS rules by excluding other members from their listings. Eventually this type of behavior results in a bad reputation, and it usually comes back to haunt them.
Dear Tom,
That is interesting to me because in Atlanta, a member of FMLS is REQUIRED to put Listings in the data base within a specified time. Perhaps these agents are not members of the MLS you use. If they are - wonder if your MLS has Listing entry requirements?
Jon (#16) has an interesting comment: The agent has to present the offer or risk losing a license. Are the laws the same about this all over the country?
Lenn (#5) suggests thinking "outside the box" to get the Client the area wanted. Also, as she refers to someone else to List, Lenn avoids any fiduciary conflict between the needs of the Buyer and the Seller.
I love how much there is to learn on ActiveRain!
Have a happy day -
Lynn
Good point. What a way to generate and keep all pocket listings for themselves.
I have not come across that yet but I think I would do what Lenn suggests.
Lynn #19,
They are REALTORs(R) and members of the local MLS. Our listing agreements allow us to specify if a listing will be placed in the MLS. If placed in the MLS, there must be an offer of compensation to cooperating brokers.
Tom
Hi Tom~ It seems as if the only interest being protected is the agents being able to get both sides of the commission. There is no way a seller would agree to limiting the sale of his home. It only takes one buyer and the agents have the buyers! I guess the seller doesn't know that most homes are NOT sold by the agent that has it listed but by another agent!
Tom- We have that here too. Most of the time the brokers are NOT members of MLS. That being the case, they don't have to obey any of the MLS rules. We have had sellers make this request of us too. We have sellers who want to list with a broker and only that broker can sell their property and they do not want their property on the MLS. Katerina
I've seen this arrangement before. I don't think I would be listing my home with them but the things people will go along with I guess. Nobody likes a monopoly -- they may go along with it but they don't like it.
Tom, Haven't seen it here, and hope we don't!!
I have run across this once before, in my own neighborhood. I had a buyer who wanted to see the home. The listing agent told me I'd have to get the co-op commission from the buyer because the sellers were willing to pay only XX% commission. The buyers chose not to see the home.
There is a place on our listing agreements (in the North Texas area) with a checkbox to indicate if the listing will or will not be input into MLS and there are blanks for the amount of commission to be paid to co-op &/or subagent brokers. These commission fields will take a 0 amount. While this practice is allowed, it does not give the MLS exposure that most properties need to get numerous buyers through.
We had a similar situation in our area a few years ago with a small company operating in a town. I didn't have to deal with them but I diid question whether it was legal.
Occasionally in our area offices have Exclusive Listings which means they are to be kept in house and not go on the MLS. This is legal as long as they sign a separate form OKing it.
Normally it is done on a HOT house in a hot neighborhood which the Broket knows will sell quickly and have multiple offers from his agents.
It is not something that I recommend to my sellers because I do not think it makes sense. I'd rather put the home on MLS and let it go.
Well believe it or not, I once had a seller, he was a eldery gentlemen and had been very successful in his younger years. He listed a house with me and refused to let me put it in the MLS. Of course at the time buyers were buying anything and everything. He demanded I sell it myself. After a long conversation with my Broker I took the listing.
It was the most uncomfortable I have ever been! Other Realtors called wanting to show the home because it was in a very popular area and I was so embarrassed and felt like such a jerk. It was my most horrible experience in memory. Luckily the home sold quickly. Bottom line.. I will never take a listing like that again!
Lenn makes the most useful comment. This is an opportunity for you to educate sellers in the neighborhood. (Randomly of course, not just those actively listed). This practice is not good for them and they should know it.
I don't see why a seller would even consider doing this.I just wonder what they say when they are trying to pitch this?
Loreena says that she wouldn't be surprised if the seller's didn't know about this behavior. I say many sellers can be talked into anything if they think they can save some money.
The agent who said that they sell their own listings.....I hate to say it, but she already knows that many buyers will dump their agent in a heartbeat when it comes to new construction. All they have to do is walk onto the site unaccompanied by their agent, be greet by the onsite agent and Voila', the buyers let themselves believe that they are getting a better deal without having their own agent.
Tom,
Every day I hear of something mind-boggling. That just doesn't make any sense in terms of getting the word out on the house? Like Linda mentioned in ATL, as a member of our FMLS, we HAVE to enter all listings within 48 hours.
Now, we don't have to offer any percentage to the selling agent specifically. It could be 0% or almost that. It would equal the same thing, but with more exposure?
Interesting.
All the best, Michelle
We don't play that here. We used to . . . but it's not cool. Area agents can be participants of our RMLS. They don't have to be participants of the RMLS, but if they want to access the RMLS, they do have to be a participant. If a participant of the RMLS takes a listing, it's required in our rules & regs that it be published. The only way they can get around NOT putting the listing in the RMLS is if the owner puts in writing that they are instructing that broker/brokerge NOT to list it in the RMLS. There's a form for that. You could say, it's by default ALL listings go into the RMLS . . . and only if the homeowners wants to opt out, they must put it in writing, Since most homeowners/sellers what it in the multiples, they don't want to opt out.
This is what it reads:
"3.3 Office Exclusives. If the Owner refuses to permit the listing to be Published by the RMLS, the participant may take the listing as an Office Exclusive. Such listing shall be accompanied by a written statement by the Owner stating he does not desire the listing to be Published by RMLS. Such statement shall be provided to RMLS within four business days of the date."
Seller might as well have sold FSBO. Can't figure who would benefit from this except the ....agent/brokerage selling the home. Wow
Not putting a listing into MLS and refusing to honor a co-broke are actually two separate issues. Some sellers do not WANT MLS exposure, but they DO want the house sold. Those sellers probably do not care who sells the house.
I'd sure like to know how Jon's (#16) plan would go over if offered to the sellers. Present the seller (or their quasi agent) with an offer which specifies that your commission is being paid by the buyer. The old "bird in hand" urge may, indeed, win out over the other agent's exclusivity. If the agent will not respond to your inquiries, take the offer to the supervising broker.
Tom~ I assume that the photo you are using is a mock-up of some sort, since it has no phone number?
We have a waiver for sellers if they choose to keep the home off MLS. It is usually only used when a home owner is having an event at their home, having work done to the house, or during illness. Sellers of high dollar homes often request that the listing agent be present during showings but realize that most serious buyers prefer to have their own representation.
That is my main concern regarding your situation - buyers being forced to go through the transaction without being able to choose their own representative. The whole reason Buyer's Agency was created was to allow buyers of real estate the same rights of representation as sellers have always had.
I don't see any way that this can be beneficial for the seller. Why eliminate all of the potential buyers of the MLS agents? If this is the listing agent's idea they are clearly acting in their own best interest, not their seller's.
Good for them. Imagine working in a job you love without having to pay MLS, state, and local board dues, or, belonging to a National Organization that takes your hard earned money. The future of real estate is knocking.
Remember; real estate is local and each market is different.
Hi Tom, and these homeowners are probably wondering why their homes are not selling. I wonder what answers these agents are giving them.
Boggles the mind that a seller would agree to such a listing. I love Lenn's idea of a blanket the neighborhood letter.
Tom,
It looks and sounds like the agent avoids (sort of) the whole issue of cooperating brokerage and thus can charge a straight fee for her services that doesn't have to be split. Then the buyer doesn't have any representation either, so she double-ends the transactions that way, avoiding the dual agency issue....
There's a couple agents here that do a lot of non-mls business. I'm not sure what their value proposition is except they tend to be high end and discreet transactions. That doesn't seem to be the case here though as they have signs in the front. I wonder if the agent discounts her fee considerably?
Gregory,
The funny part is they are REALTORs(R) and pay all the dues...
Tom
Why would the seller agree to such a terrible representation? No MLS means very limited exposure. The agent obviously doesn't care about the seller - her only incentive is her commission.
Aren't you more interested in something that is ahrder to get?
If you believe in capitalism, and if you assume that all sellers aren't idiots and they've actually considered what they are doing before doing it, then I say this is completely legitimate, whether you like it or not . . . just sayin'
JA,
It is legal if the listing agreement is filled out correctly.
Is it ethical though? Is the agent fulfilling their fiduciary responsibility but limiting the exposure and refusing to cooperate with other agents?
Tom
Hmmmm,
sounds like this LA must be performing some cute little scratch thru's on our listing agreements, Tom! It's clearly states that the property will be ON THE MLS WITHIN 5 DAYS! I doubt very seriously the LA lined through this and got it initialed by the seller.
Here's what you do....
take that page.. HIGHLIGHT IT and mail it to all the houses. On the return address mark the LA address you find online.
Next,
File a swift complaint to TAR as this agent (regardless of their agreement) is promoting her OWN interest before her clients. I'd LOVE to hear how she isn't.
Last,
Pee on this agents tire next time you're trolling with your friends.
Ganight!
Nino,
Thanks for droping by.
Take a look at the TAR-1101 Listing Agreement. Paragraph 6 is called "Listing Services." There are two choices--A, File with the MLS or B, Not file with the MLS. Paragraph 8, Cooperation with Other Brokers, only applies to listings filed in the MLS. I think it's legal if the paperwork is done correctly.
The lack of MLS data also impacts appraisals. Texas is a non-disclosure state so the only place to find the actual sales data is in the MLS.
Tom
Tom, This happened to me once too. The differance was the home was on the MLS but listed as an exclusive listng. I made an appointment and showed the house. Then got a call and was yelled at by the listing agent asking why I didn't pay attention and see that the listing was excusive. Our local showing service had instructions for showing and everything else. I can not believe that the seller had anyi idea.
Maybe a new business model. .I can't possible think someone will be that stupid to do something without checking their local laws. .
Consider this:
A neighborhood with 300 houses that sell 30+ houses every year
You tell everybody constantly via postcards that you can sell their home for 2% and that's it!
You will do everything except the MLS thing. .because then they will be required to pay another commission
Any homeowner wanting to sell their home in this neighborhood under a traditional listing. . they will have to sell their properties at a higher value to match the 2% method
After about 1 years of constant postcards, newsletters, parties and neighborhood facebook fan pages you can take control of this market. .
The consumer:
If you want to live here. . .they have to buy it trough this method. .and if there is another agent involved, they will have to pay them . .becuse the seller wont
Is this the future of Real Estate?
Seems like ignorance on the part of the seller and possibly greed on the part of the listing agent, but based on some of the comments, the LA may be innocently following their seller's preferences.
I have seen this in a few neighborhoods in my area, and it is usually a case of listing agent greed and seller ignorance. (They don't know or realize that 85% of the sales have 2 different agents involved!)
Most of the time, it's pretty obvious which party got shorted by the double ending agent (it could be either the buyer or seller!)
@ Tom and Nino: I could use Greg on my team. I don't have anyone who concludes disagreements by relieving one's self on the other guy's automobile. That sure would take kaunas...hmmm....now that's the problem, no one on my team has kahunas. Clearly a missing link.
I don't know, is it greed or selfishness.
This gives a whole new meaning to "exclusive right to sell" Without knowing for sure, is it the agent or is it the seller, maybe they are trying to come up with a new way to market homes?
I really don't get this at all, but it doesn't surprise me.
Tom, a few years ago, a real estate company in our area was listing homes at prices higher than market value. When we would call to request a showing, we were never able to gain entrance......these guys were listing them and marketing to out of state investors. Making a long story short.....they have just been indicted for fradulent real estate practices.
Tom, you raise a good question. Why would anybody agree to withhold the property from the MLS? The answer is, they don't know how leaving it out of the MLS affects the ability to sell and get the highest possible price. Since you have not seen the listing agreement, you don't know what the dual agency compensation is. Do they lower their commission to get them to agree to let them be the exclusive seller and buyer agent?
I would wonder why a seller would limit their listing this way? Great post.
Consider this: the house has previously been listed by another agent. To have the CDOM reset back to 0, at least in our MLS, it must be off the market for 31 days. The new listing agent takes a 31 day listing, with both seller and agent agreeing not to put the listing into MLS, and they have a longer listing agreement that begins after the first expires allowing MLS advertising. The agent can market the home for a month without MLS, then add the new, longer listing and get the CDOM reset back to zero.
Lorrie,
I would understand that and I've done it myself. But in this case, they never go into the MLS. The area is selling well so they don't see the need to cooperate.
Tom
Then I'd probably do what they're doing, but using a reduced commission structure to save the seller some money.
This seems crazy to me!!! If you are a member of our MLS, we actually have rules against this kind of selling tactic, but wow, this is the worst way to represent a seller.
Sounds like the seller is happy with the arrangement, especially if the subdivision is selling well. It is just difficult to explain to your buyers that they are not able to purchase a home there unless they are represented by dual agency with the seller's agent.