Both the National Association of Realtors (NAR) and local affiliates (e.g., NABOR) require “Clear Cooperation” in their rules and regulations.
Which begs the question… What is Clear Cooperation?!
Clear Cooperation requires listings to be submitted to MLS “within one (1) business day of marketing property to the public.”
“Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing in public facing websites, brokerage website displays, digital communications marketing (email blasts), multi-brokerage listing sharing networks, and application available to the general public.” M.L.S. of Naples, Inc., Multiple Listing Service Rules and Regulations -Section 1.B.
What if the owner prefers not to place his property in MLS? The owner may have privacy concerns or is hoping to test the waters before officially putting it on the market. Under Clear Cooperation, the agent must file the listing, accompanied by a certification signed by the owner that he does not want the property in MLS. If the owner later changes his mind, and wants to publicly market the property, then the property must be listed within one (1) business day.
Sometimes agents mistakenly (or not!) violate these rules.
How do boards uncover these violations? A Marco Island agent recently gave me the following common example.
Competing agents complain to the Board when they see a listing on Facebook that is not listed in MLS. The board then may call the broker and give 24 hours’ notice for the listing to be inputted into MLS.
Unfortunately, this first violation provides minimal deterrence to some who don’t mind the occasional broken rule, especially when the violation is broker on broker.
In fact, some agents have commented that a fine is simply the cost of doing business, and pay little attention to the rule. A brief summary of the Violation Schedule explains why.
- The First violation requires the offending agent to watch an educational video and pass an assessment on the video. The offending party must comply with the education and assessment requirements within 3 days. The listing must be filed in MLS within 1 day.
- The Second violation subjects the agent to a $500 fine and requires the listing to be filed in the MLS system within 1 business day.
- The Third violation has more “teeth”. The agent may be fined up to $15,000 and a 6-month suspension of MLS services.
Though you should consult with your local MLS before taking any actions, there are likely a few other ways to work around the Clear Cooperation rule. For example, the owner could put the listing on Facebook himself. After all, the Board has no jurisdiction over the owner unless he is also an agent. But is it worth it? The owner’s Facebook won’t reach all audiences as efficiently as MLS. After all, MLS is a central repository for properties listed for sale. Facebook, on the other hand, covers a multitude of diverse topics.
We advise our owners that putting their property in MLS exposes their property to a much larger market, leading to a better price. For example, friends contacted me a few months ago about an agent who offered 2 different commission structures.
- Pay a 5% commission if the property was listed in MLS; or
- 3% if kept as a pocket listing.
The strategy was that the listing agent may be able to sell it within their own circle of clients and agents, thus avoiding the need to split a commission with someone else. What should they do? I said there was risk either way, but I personally would put my property in MLS to expose it to the most people. Ultimately, they used MLS and sold the property for $50,000 more than they thought it might be worth.
Ultimately, our advice is don’t break the rules. Frequent appearances before the disciplinary board will not further your career, or your reputation with your peers. If your owner prefers not to put the listing in MLS for personal reasons, then file a copy of the listing with MLS with the required owner certification, and limit your marketing within your firm and personal acquaintances. Avoid public marketing unless the owner is willing to list in MLS.
As you determine what is right for you and your clients, do not hesitate to reach out to our office for legal advice and to schedule your closing – we would be honored to help. We hope that you enjoyed these articles. If you should have any questions, please don’t hesitate to contact us directly!