Effective March 1, 2020, if you sign a listing agreement with a Realtor to sell your home, your home must be listed on MLS within 2 days. Unless you 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 showed in two days. So, what are your options and what are the pros and cons of the Withhold from MLS form and 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 Association 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 or in many cases strictly to agents within their own office. 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 can not do so to the detriment of the buyer. 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 following is part of the Withhold from MLS form:
There are times when the Withhold from MLS form has been used that may make sense. Say you have a lake home that you want to list for sale this coming summer. The withhold from MLS form allows the agent to actively market and show the home during the winter months. It is possible that a buyer may come forward and the sellers can move on with their plans. But 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.
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 and the Realtor can get the home market-ready. 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. The only negative is that it can’t be shown until then. Which isn’t really a negative because it’s not ready to be shown.
In summary, if you are signing with a Realtor, 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 and is that standard in the industry?
What do you do for open houses?
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 that Realtor who gives you the highest price. For any questions that you have on home selling, contact me. I would love to earn your business.