It would appear that the San Francisco Association of Realtors (SFAR), California Association of Realtors (CAR), and by default the National Association of Realtors (NAR) is again realizing agents want to have control of their listings, clients deserve an alternative place to market their properties for sale, and new technologies can actually foster a healthy real estate environment that could lead to more transactions. Therefore, they don’t want you using them.

Recently the SFAR issued their latest “Advantage Online”. In the latest issue they had this to say:

Participation in Private MLSs and MLS Clubs Involves Risks

With apps commonly available, and the increased use of social networking sites, private MLS groups, such as [losers], have been formed that operate outside the MLS.

Frequently, these private groups set up rules for membership, such as requiring listings taken by club members to be marketed only through the club and not through the MLS, that only select practitioners can participate, and that offers of compensation must meet certain minimums. Furthermore, these private group members are, for the most part, members of established MLSs governed by MLS rules and the REALTORS® Code of Ethics (COE).

In response to this growing trend of online private MLS groups, the California Association of REALTORS® (CAR) has developed a legal brief reminding agents and brokers of the various MLS and COE rules that can come into play by participating in these private MLSs, as well as the legal concerns and risks.

The Association encourages its members to review this briefing document, found [right here], for specific guidance.

Those are pretty powerful and scary words, aren’t they? Not really. Sharing a picture on Facebook of yourself half naked doing keg stands involves risks, getting listings and allowing your seller the option to market their property alternatively should not.

If you actually click through and read the “briefing document” you’ll notice a lot of talk about the “fiduciary duty” of licensed real estate professional to client. Essentially do right by your client and advise them on the best path. This is the year 2011!

Every Realtor’s fiduciary duty at this time should be to advise their clients they may be able to get as much, or more, exposure marketing their property for sale on any number of new media sites, like PocketListings.net, Twitter, LinkedIn, Trulia, Zillow, etc. They should also be advising their clients about the potential pitfalls of hanging their property out to dry on MLS, the thousands of “bottom feeders” out there trolling MLS for price reductions and 100+ days on market, the fact that a listing on Trulia will return more hits to the property than any MLS exclusive listing could ever dream of receiving, that more than 90% of all home buyers begin their home search online and that online search is quickly going more social (heard of Facebook?).

Real estate practitioners should also make it clear and let it be known IT IS NOT ILLEGAL OR UNETHICAL for an agent to market a home “not on MLS”, and it is the decision of the seller where they choose to market their property, not the decision of the agent or local real estate governing body.

The MLS Rules make an exception to mandatory submission only in the event the seller refuses to permit the listing to be disseminated by the service and signs a certification to that effect. Since any decision to forego the marketing opportunities of the MLS is supposed to be driven by the seller, the MLS takes the extra step of requiring the listing broker to provide evidence of the seller’s instruction to keep the listing off the service. In instances where the seller refuses to allow the listing to be submitted, to avoid sanction by the MLS, a listing broker is required to submit a seller-signed exemption to the MLS within the same time period listing broker would otherwise be required to submit the listing.

Betcha didn’t know that. Translation, if you don’t want to list on MLS, you don’t have to. It’s as simple as a one page “Seller to Exclude Listing from MLS” form submitted to the local MLS. You can refuse, and you can force your Realtor to earn their commission by actually putting effort into marketing your property for sale.

Many agents out there will pressure clients to sign a listing and force them on MLS arguing that there are no other ways to get property sold. The logic being, sign the listing, get it on MLS, then go back to the client to get a price reduction, followed by another price reduction, and eventually get down to market price and earn their commission. Has the agent actually “marketed” the property? Often they have not. They simply put it on MLS and consider it marketed. That doesn’t sound very fiduciary, does it?

Don’t think I’m saying the MLS is worthless and that all agents do what I just described. MLS is an extremely powerful tool and still the most popular way to get your property sold, and should certainly be the current #1 recommended choice for “listing” a property for sale. However, these new services are popping up, and gaining traction. It’s not only important that agents and clients recognize this fact, it’s your agent’s fiduciary duty to let you know about them, and give you the option to use them, not hide them from you.

There is no longer one magic bullet (MLS) to sell a property. The economy is staggering, home sales are suffering, and millions of homeowners would love to sell. The internet is here to stay and “social networking” isn’t going away. Realtor Associations across the nation should be working with these new companies to encourage market activity and technological innovation to foster more transactions, not attempting to stifle them. The phrase “off market” isn’t accurate. It simply means “not on MLS”. If a property is for sale, it’s for sale. So market it! Get exposure. Get it sold!

I remember when I got into this business about 10 years ago and my broker was hesitant to even contact her clients via email. I also remember when I started a “newsletter” (sfnewsletter) that quickly grew to many thousands of readers when I was told “postcards are more effective”. Then I started a blog and was told “blogging won’t get you anywhere” (have a look in the right hand column…every transaction there came as a result of this here blog). Now, from my very same colleagues, I’m hearing “MLS is the only way to get property sold”.

It’s just a matter of time before everyone realizes just how powerful a marketing tool sites like PocketListings.net will become, just like they eventually have come to embrace email, the internet, and little sites like Facebook and Twitter.

I’ve said my peace. Have a great weekend!

–San Francisco Association of Realtors Statement on Private MLSs
–PocketListings.net [An MLS Alternative]