A growing number of agents say they’re concerned inventory challenges will only exacerbate the problem of pocket listings – a phenomenon that is now challenging key markets and the very idea of “agent cooperation.”
“I find the whole idea of not putting it on MLS is more challenging,” Vancouver-based agent Joe Manhas tells REP. “I have people saying, ‘Yeah, bring me X dollars and I’ll sell it.’ I’ll make a note, and then I’ll forget about it. But if someone says to put it on MLS, we’ll sell it very quickly.”
He’s not alone in his concerns, with Realtors in another frothy market now lobbying for a stop to the use of pocket listings – seen as eroding longstanding cooperation between agents.
Currently, the California Association of Realtors estimates one in four properties in the high-end San Francisco Bay area – a market increasingly compared to Toronto and Vancouver – is sold through pocket listing. That phenomenon, where listings are kept off the MLS by agents hoping to act as both selling and buying agent, is being blamed for undermining that shared listings database.
California is now stepping in to warn agents against the practice, although it remains legal for now.
But Canadian agents are no less concerned about their own markets and the threat of pocket listings as the number of new listings for August climbed less than one per cent year-over-year despite low interest rates.
But there’s another concern, says Manhas: Those listings are putting undue pressure on agents who will ultimately have to work harder to drum up interest in the property.
Nonetheless, Pocket listing do, in fact, cut regulatory muster.
Despite how they may be perceived, Bruce Matthews, the deputy registrar of regulatory compliance for the Real Estate Council of Ontario (RECO), says the regulatory body has no issue with pocket listings provided the seller agrees to those terms.
“Nothing prohibits a brokerage from having an exclusive listing,” Matthews tells REP. “As long as the appropriate disclosures are made when the client is being signed on, and the other aspects are complied with, I have no problem with that scenario.”
Still, Manhas believes that getting a listing on the MLS system best serves the client.
“For the client’s benefit, it is better to get true exposure on MLS,” he says. “And giving all the agents a chance creates a competitive situation, and if the property is worth more, the seller will get more.
“If you’re relying on one or two buyers [through a pocket listing], they’re not going to pay top dollar.”