Reigning In Pocket Listings: Chicago Area MLS Creates MLS For Homes Not On MLS

I’ve written a few posts in the past about the wild, wild west of pocket listings that sounds a heck of a lot sexier than it really is. The basic concept is to secretly market a home for sale so that nobody will really know that it’s for sale except for that perfect buyer who is lucky enough to just happen to have the one real estate agent who just happens to know about all the top secret deals that no other agent knows about. It makes for a great sales pitch during listing presentations to potential homeowners that can’t see the obvious flaws in such a system.
To facilitate this process there are a few non-MLS databases out there that serve the same purpose as the MLS but are a lot clunkier to use. And some of these databases are only open to the top agents since all the potential buyers will only be working with the top agents. (Just in case, I’m going to point out that the sarcasm in that last sentence is a lot more subtle than the sarcasm in the previous paragraph.)
So the Chicago area MLS (Midwest Real Estate Data LLC) just came out with their own Private Listing Network, which is actually attached to the regular MLS but requires fewer data fields than the MLS to describe a listing. My take on why they did this was to provide greater structure to this whole pocket listing concept and to keep themselves from getting shut out of this segment of the business. Here are the official reasons:

  • To provide our customers a secure network to enter their “Coming Soon” listings, with an opportunity to pre-market these to their peers.
  • To expose Private Listings to peers, maintaining the spirit of cooperation and compensation.
  • To accommodate a need in the MRED marketplace at the request of numerous brokerages and their associates.

I’m sure it’s “all of the above”. The fact of the matter is that their solution is better than leaving it up to a hodge podge of systems operating at less than scale. I can’t help but speculate that this new system could seriously impede the non-MLS systems that are used in our area. What would be the advantage of using those systems when you have access to a better structured system open to all real estate agents that’s basically attached to the MLS?

If you are interested you can read the FAQs on the Private Listing Network (PLN), which appear to be available to the general public. Perhaps the most significant rules about this new system are that the real estate agent must have a listing agreement with the seller in order to put the property on the PLN and that if the listing appears on any public facing Web site then it must also be on either the regular MLS or the PLN. I assume for purposes of this rule that the top secret agent-only pocket listing systems would not qualify as public facing Web sites so a real estate agent could have a listing on those sites that is not in any of the official systems.

Why would real estate agents and their sellers want to be on the PLN or any non-MLS system for that matter? I’m hard pressed to come up with a good reason except in the case where the listing agent wants to see if they can get any initial reaction to the listing, including but not limited to pricing feedback, without incurring excessive market time or generating a history of price reductions.

The only thing is I suspect this concept sounds a lot better in theory than it does in practice. How can you really get feedback on a listing without other agents actually physically seeing the property? And then you still have the whole problem of really poor price discovery by virtue of the fact that you are severely limiting your buyer pool.

#RealEstate #ChicagoRealEstate #PocketListings #HomeSelling
Gary Lucido is the President of Lucid Realty, the Chicago area’s full service discount real estate brokerage. If you want to keep up to date on the Chicago real estate market, get an insider’s view of the seamy underbelly of the real estate industry, or you just think he’s the next Kurt Vonnegut you can Subscribe to Getting Real by Email using the form below. Please be sure to verify your email address when you receive the verification notice.

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