This regularly-scheduled sponsored Q&A column is written by Eli Tucker, Arlington-based Realtor and Arlington resident. Please submit your questions to him via email for response in future columns. Enjoy!
This past week, Bright MLS announced major changes to prevent agents and brokerages from marketing properties for sale that are not entered into the MLS.
Previously, there were no restrictions on where and how long a property could be marketed to the public and/or other agents if it was not in the MLS. Effective immediately, a property must be entered into the MLS within one business day of any marketing (some exceptions apply). Violators will be fined up to $5,000 per violation.
Initially it might seem like this rule is unnecessarily restrictive and hurts consumers, but I strongly believe it is a net benefit for the marketplace.
What is MLS?
MLSs (Multiple Listing Services) are the organizations that allow agents and consumers to see all properties for sale in one place; the database of record that powers your favorite property search apps/websites. They are private entities born from the cooperation of regional brokerages, funded through brokerage and agent fees. There are around 600 regional MLSs across the country.
What is Bright MLS?
Bright is the name of our local MLS and is the largest in the country. It is responsible for property listings in all of D.C., MD,and DE, most of VA and PA and some of NJ and WV.
How it Benefits You
This type of regional cooperation between brokerages means that buyers have access to every home for sale in one centralized location, thus increasing the odds of finding the right home, and sellers can ensure their home is visible to every buyer, thus increasing the odds of their home selling for full market value.
A market without an MLS is fragmented, inefficient and not in the best interest of consumers.
New Pre/Off-Market Policy Change is Necessary
Over the last few years, in an effort to distinguish themselves from competition, brokerages and agents were engaged in a fierce competition to establish an inventory of pre/off-market properties marketed through independent websites, portals and social media channels. The idea was that if an agent or brokerage has a large inventory of off-MLS properties, in addition to access to all on-MLS properties, they’d be able to attract more clients.
These efforts led to fragmented “shadow markets” across the region, making it impossible for buyers to access all properties for sale and potentially limiting a seller’s market exposure. The Bright MLS Board, made up of brokers from across the region, recognized this problem and unanimously determined that changes were needed to secure the enormous benefits of cooperation.
The new rules still allow intra-brokerage marketing of off-market properties and agents to have one-off conversations with other agents and/or buyers about off-market properties, but agents/brokers cannot engage in public or inter-brokerage marketing.
What to Expect
Going forward, you should no longer find a property being marketed for sale or coming up for sale that is not entered in the MLS and widely available across all/most consumer-facing property search websites/apps. This includes social media, even Instagram and Facebook Stories.
One caveat is that not every consumer-facing property search website/app picks up properties entered into the MLS with a Coming Soon status. Bright MLS allows properties to be entered as Coming Soon for up to 21 days.
Biggest Disadvantage, Possible Tweaks
The net effect of the policy change is a major benefit to our marketplace because it strengthens the core principle of the MLS, being that centralized listings via cross-brokerage cooperation is in the best interest of consumers and agents. However, there are disadvantages to the new rules and I expect Bright MLS to make tweaks over time to address them.
Under the current Bright MLS rules, a property can be entered into Coming Soon status for up to 21 days before it either needs to be converted to an Active listing (when days on market start accumulating) or pulled off the market. The biggest disadvantage of the new rule is that it severely limits property exposure 21+ days before a seller is ready to officially list a home for sale.
There are plenty of scenarios when a seller wants/benefits from advanced, albeit limited, market exposure 21+ days out and I hope Bright MLS can find ways to provide that through the MLS instead of pushing that activity off MLS (which is no longer allowed).
Some use cases for wanting to begin marketing 21+ days out are properties under construction and owners who are preparing to sell 2+ month out who would like to give notice to the market of the upcoming sale. For properties being built or undergoing major renovations, I’d love to see Bright MLS offer an “under construction” status. To support sellers on an extended sale timeline, I think it makes sense for Bright MLS to significantly increase the number of days a property can remain in the Coming Soon status.
If you’d like a question answered in my weekly column or to set-up an in-person meeting to discuss local real estate, please send an email to [email protected]. To read any of my older posts, visit the blog section of my website at www.EliResidential.com. Call me directly at (703) 539-2529.
Eli Tucker is a licensed Realtor in Virginia, Washington D.C., and Maryland with Real Living At Home, 2420 Wilson Blvd #101 Arlington, VA 22201, (202) 518-8781.