Withhold from MLS vs. Coming Soon
Effective March 1, 2020, if you sign a listing agreement with a Realtor in Minnesota to sell your home, your home must be listed on MLS within 2 days, unless you also sign a Withhold-From-MLS Form.
In most cases when you sign a listing agreement with a Realtor, you are just getting started in the process. There is still staging to be done, photos to take, brochures to be printed, possible Truth in Housing (TISH) Inspections to be done, so it is very unlikely you will be ready to have the home ready for showings in two days. So, what are your options, and what are the pros and cons of the Withhold-From-MLS Form or listing the home on MLS as a “Coming Soon” listing.
Let’s take a minute and understand why there is a need for the National Assocation of Realtors to come out with this 2-day rule that has been adopted by the local Realtor associations in Minnesota. If you’ve ever heard the term “pocket listing” you understand that these are listings not on MLS but which are exclusive to the broker holding it. That broker may decide to market the listing to a broad audience (ie. posting it on MLS), or in many cases strictly to agents within their own office (Pocket Listing). Advertisements can be made to buyers that “we have listings not on MLS” to attract buyers. If the listing is held within a particular brokerage it gives those agents an advantage in a time of multiple offers since they will only be competing with the few agents in their office vs. thousands of other Realtors in the area. And, because these pocket listings are being sold either by the listing agent or agents in their office, that seller is going to be in a Dual Agency situation which states that the agents can’t negotiate to the detriment of either party. So, that agent you just signed up with to represent you in the sale of your property can not do so to the detriment of the buyer (ie. can not put your interests first). In many cases, the sellers of these properties don’t even understand that they have agreed to sell their home this way as they don’t realize they have signed a Withhold from MLS form as part of the multiple forms they signed with the agent when they listed their home. The Withhold from MLS form actually states the following:
- That in 2015, real estate transaction volume for over 74,000 properties valued at over $1.8 billion was conducted through the Northstar MLS system. So, by withholding a property from MLS:
- You keep your property from being exposed to the broadest market of over 15,000 agents and their buyers.
- You eliminate the ongoing advertising of having your listing available 24/7 to all potential buyers regardless of when they start looking.
- You limit agents to only those affiliated with your listing broker and/or those with whom they choose to cooperate with.
- Keeps your property off of other broker and national websites.
It’s because of the wide use of “Pocket Listings” that the Realtor’s Association implemented the two-day rule.
Withhold from MLS Form
There are buyers who want there home not listed on MLS. Say you have a lake home that you want to list for sale this coming summer. Or, an agent has approached you with a buyer. Or, you just don’t want pictures and information on your home posted on MLS. The withhold from MLS form allows the agent to market and show the home to other agents in their brokerage. They are not able to market the home to the general public by any means. While this may be a good option for some sellers, in a buyers market it does not allow the seller to maximize the sales price on their home by marketing it to the largest possible pool of buyers through MLS. In all cases, listing the home on MLS as part of an effective, professional marketing campaign will bring forth the most buyers, create competition for the property, and produce the highest sales price.
Coming-Soon
It is with that “bringing the most people to the table” mentality that we can now discuss the pros and cons of listing the home on MLS as a Coming Soon property. So, you sign the listing agreement. As part of that process, the Realtor has already measured your home, taken notes on the highlights of the home and area, discussed the updates you have done, and may be doing, taken some pictures, and you have both agreed as to what the listing price will be. That agent has all the information they need to enter the home into MLS and create a narrative as to why buyers should go see it. What the “Coming Soon” category allows is just that. The home details are entered into MLS and Realtors are informed that the listing will be going active on a certain date. In the meantime, the sellers can get the home market-ready and the Realtor can get the marketing pieces finished. The pros are that the home is being marketed to the thousands of Realtors across the Minneapolis, St. Paul market and their buyers are anxiously awaiting the chance to go see the home when it does flip over to the active status. During this time in the Coming Soon status the home can also be marketed by mailings, social media, and other means to the general public. The only negative is that it can’t be shown until then. Which isn’t really a negative because the home may not ready to be shown. You can have your home listed in the Coming Soon status for a maximum of 21 days and it will not accumulate “Days on Market” until it goes into the Active status.
One more Status
If you have your home listed as active on MLS and need to take it off for a few days while you have relatives in town, or have contractors in to complete an update, there is also the Temporarily not Available for Showing status (TNAS). While in the TNAS status your home will not accumulate “Days on Market.” There are also no limits on how long it can stay in this status.
In summary
When you are signing with a Realtor to list your home, pay attention to what your signing and ask questions.
What is this form for?
How will the home be marketed?
Do you hire a professional photographer?
Where can I expect to see the home online and in social media?
What will you be paying out to the Buyer’s Broker, how does that compare with other listings?
How do you continue to market the home after the listing is signed?
The more you understand when listing your home, the fewer surprises you can expect during the process. Always get at least two marketing proposals and don’t be swayed by just price. For any questions that you have on home selling, contact me. I would love to earn your business.
