There was a time, before multiple listing services existed, that brokers marketed property only through yard signs, word of mouth and individual advertising. That one-to-one marketing system limited exposure. Using code words or not, it was easy to control who was able to purchase property when property was advertised only to certain people. A buyer who was not deemed suitable by the real estate broker and the seller would never learn of the availability of the property. With the advent of the MLS, a listed property is marketed broadly, to all potential buyers, regardless of whether the buyer is known to the listing broker and regardless of what the buyer looks like or how the buyer thinks. Most MLSs introduce property to worldwide buyers through a download to various real estate internet sites through syndication and IDX feeds. The ability to expose a seller’s property to the broadest market is the very reason MLSs were created in every corner of the country.

In Washington, most residential brokers are members of NAR and/or NWMLS and most residential brokers find value in marketing residential property through the MLS to which the broker belongs. For decades, NWMLS rules have required listing brokers to input their listings in the NWMLS database for sharing with other brokers and buyers. More recently, NAR adopted a similar policy known as the Clear Cooperation Policy. These policies undeniably further fair housing goals. The policies have some key differences but the over-arching driver for both policies is the same: when a marketed property receives broad exposure, more buyers have an opportunity to purchase the property, regardless of whether the buyer knows the listing broker or not. There are benefits to sellers when more buyers view seller’s property. In very general terms, more buyers for a property will typically improve the seller’s price and terms through competitive negotiations.

Common sense suggests and history shows that the best way to provide exposure of seller’s property to the largest number of buyers and buyers who demonstrate a diversity of background and thought, is through the MLS. The MLS is the one and only central repository for information regarding the availability of real estate in a localized area. While there are lots of websites and other real estate promotional opportunities, each MLS offers the most comprehensive database of available properties within its region. It is the only reliably viable option for buyers to view property outside the presence of seller and listing broker. Thus, an MLS policy creating an obligation on listing brokers to market residential property through the MLS is a policy that promotes the goals of fair housing.

If a broker operates outside the framework of the broker’s MLS to market property, many buyers, if not most, will never know the property is available. “Pocket listings”, or as they are sometimes called, “shadow listings” or “off-market listings”, will be seen only by the buyers who are introduced to the property by the listing broker or the seller. This begs a simple question. If a property’s availability is exposed only to acquaintances of seller or listing broker, what is the likelihood that the property will be exposed to potential buyers who look and think differently from seller and listing broker? Said differently, what is the likelihood that a property which is made available only to the acquaintances of seller and listing broker will sell to a buyer who is a member of a protected class under fair housing laws? Any chance is significantly diminished as neighborhoods retain long established consistency of race, religion and other immutable characteristics.

As is the case with seemingly all industry policies these days, there is enormous controversy and confusion swirling around these MLS mandatory listing policies. Politics, personal biases, fears and uncertainty often drive frustration and anger. Cutting through all the chaos, these MLS listing policies result in a goal that every real estate broker should be able to cheer. The policies result in a market where every buyer, regardless of color, creed, religion, sexual preference, disability or any other immutable characteristic has access to purchase residential property. There should be no confusion or controversy. That is a worthy goal and policies designed to achieve that goal should be embraced by all industry members.

(Excerpt from Washington Realtors® News & Media; written by Annie Fitzsimmons, WR Legal Hotline Lawyer)

Link to the full article…