The U.S. Department of Housing and Urban Development, as well as local, state and national Realtor associations, set forth certain fair housing and equal opportunity rules, as well as broader ethical guidelines, that every Realtor is required to follow. One particular rule, which could apply in these situations, Garcia states, is that properties need to be listed in the local MLS within a reasonable amount of time to show compensation to cooperating agents.
Garcia says he sees agents posting not-yet-available properties to personal social media accounts, like Facebook and Twitter, but they’re never there for more than a week or so. The reason, he says, is because those agents are only promoting the listings while they prepare their marketing materials. If you enter an unprepared listing into the MLS, other syndication sites will start picking up and advertising them, as well, making everyone involved look unprepared.
“If you are a top agent and you get a listing, you can certainly start promoting it to your colleagues, even if they’re not yet in the MLS, because it takes a while to put together things like photos and videos,” he says. “It’s ok because you’re offering the commission other agents are used to receiving, you already share a level of trust and it generally only stays unlisted for a week.”
The downside, however, is that if you keep a listing off the books for too long, you run the risk of encroaching into pocket listings territory, which could comprise ethics and draw consequences.
What Zillow Has to Say
At Zillow, leadership is largely shirking off implications that its new feature will in any way damage the industry or misleads customers. To get the website’s perspective, we talked with Zillow representative Katie Curnutte, who shared her insights on the new “Coming Soon” listings.
“The practice of pre-marketing listings is not a new thing,” Curnutte says, “We really developed this tool for customers. Considering how competitive the market currently is, this gives them a chance to see what’s coming, get pre-approved and loop in their own agent.”
In response to comparing Zillow’s “Coming Soon” listings to the much more nefarious practice of pocket listings, Curnutte says that, if anything, the company is shining a light on what could have other wise turned into a problem.
“One of the reasons Zillow established this specific framework is because agents were already posting off-market listings to the site,” she says, adding that while it was a common practice, Zillow had no means of helping customer discern between what was on the market and what was just being advertised as a future option. Curnutte says the “Coming Soon” feature eliminates that issue, making listings more transparent and their status more apparent.
To make sure agents are not taking advantage of the system, Zillow has put in place time requirements for each listing. When an agent posts a new property to Zillow’s “Coming Soon” section, Curnutte says, they are required to include an “expected listing date,” which can’t exceed 60 days from the posting date, and check an agreement that states they are complying with all real estate licensing commission, MLS and local association of Realtors’ rules, as well as their brokerage’s rules.
If an agent’s listing doesn’t go on the market within 72 hours of its expected listing date, Zillow will automatically pull the listing from syndication. Curnutte admits that while the company doesn’t actively investigate whether agents are actually complying with local, state and national rules, Zillow does retain an “audit trail” of all “Coming Soon” listings.
“Should it come to our attention that an agent is not in compliance, we’ll remove the listing and be in contact with the agent, and his or her brokerage as appropriate, to ensure the issue is resolved,” she says.