Days old Pre-MLS group growing rapidly
FranklyRealty.com, known for being a rebel inside of the real estate industry, has launched a private Facebook group for agents only, a “Coming Soon” network of sorts that allows agents to share listings before they go on the MLS. With several local groups already established, the Northern Virginia (NOVA) group is already the largest, boasting nearly 900 members. The group has already resulted in a 100% pre-market sale, and has generated “tons of premarket showings.”
FranklyRealty.com says their goal is to get 10 to 20 percent of all MLS homes listed in a local group prior to its being featured in the MLS, noting that it is not a public group because if a listing was ready for public consumption, it would simply be added to the MLS.
The broker says the primary requirement for group members is that members give and take, asking members to post as many pre-MLS listings as possible rather than just use the forum for buyers. Additionally, the forum forbids rentals, want ads, open houses, and homes already in the MLS.
Don’t call it a pocket listing
The group owner, Frank LLosa asserts that the group is not a pocket listing, which is a frequently misinterpreted type of listing. Pocket listings are not always pre-MLS, they are often private listings of celebrities or high profile individuals seeking to keep their home out of the headlines, or offered during a lengthy marketing preparation process, typically for luxury listings.
LLosa said that the term pocket listings “has 10 definitions depending on who you talk to, also called Private or Exclusive Listings,” adding that while many have critiqued pocket listings, this new service does not fall under the category of any of the negative assessments of pocket listings, rather it is an agent community for sharing and finding pre-MLS listings, not for public consumption and completely independent of who gets what commission.
“This new coming soon forum is a virtual version of the office stand up and announce system, but across 50 brokerage firms and 1,000 agents,” said LLosa.
Coming Soon signs already exist…
“Some agents do already post coming soons on Craigslist or with a “Coming Soon” sign in the yard,” LLosa states, opining that the agent may be doing so to squeeze out a double commission. “Bottom line is, if the agent and seller wanted it public, they would, but they usually aren’t, so in this forum they feel comfortable sharing the heads up to other agents, so it is thriving.”
What’s next for the groups?
Llosa tells AGBeat that he has already been approached by an investor, but is truly seeking to build something cool before he ever considers that path, which as the industry rebel, it is no surprise that the concept was built to service clients, not a single broker.
We foresee that this could and should become a standalone website, mobile app, or at least a Facebook app so the functions can be streamlined as the private groups grow, and as the current size and pace of growth prove, they will grow, possibly accomplishing the 10 to 20 percent goal already defined.
It will be interesting to see how real estate media companies will adapt as the agent community so openly embraces the concept. Stay tuned.
Patrick Healy
July 1, 2013 at 3:10 pm
This makes me very nervous as a consumer. As it is there’s lots of different opinions on whether or not the consumer is actually ever represented. Now, listing agents and buyers agents getting together and exchanging listings before they even hit the market via MLS (arguably the most corrupt entity in the industry) isn’t going to put any positive light on the salespeople of real estate. Pocket listings, double taps, duel agency, or whatever you want to call it does not benefit buyers or sellers.
Nathan Hughes
July 1, 2013 at 3:33 pm
I’m not sure I understand the perception that the MLS is corrupt. Truly not a defensive, knee-jerk comment here — I’m curious because I don’t recall ever encountering that idea before.
The Multiple Listing Service a system that was designed for agents to share listings with one another, in order to give the listings the most exposure and to encourage cooperation by laying down rules for compensation offered between the brokers.
Agreed, though, that this is a sticky situation and that pocket listings for the sake of keeping all of the commission does no one any good (even the agent that thinks they are benefiting). Knowing Frank, I have no doubt that he has been keeping that issue firmly in mind as he designs and implements these groups.
CJ Johhnson
July 2, 2013 at 8:37 am
I see this as an attempt to circumvent VOW’s. Many REALTORS want to share with other REALTORS only but can not do so due to their MLS’s (forced by the courts and DOJ) rules allowing those with no requirement to adhere to the code of ethics to join and participate and then later cause many ethical dilemmas for sellers, buyers, and REALTORS alike. This is not a pocket listing if you are sharing it with other REALTORS. Pocket listings are greedy grabs for double ended compensation sharing information with others is not. Take a look at how many “in house” sales the big firms in your MLS participated in over the last 6 months and tell me none of those were quietly negotiated before they ever hit the MLS if ever.
Patrick Healy
July 2, 2013 at 9:22 am
Personally, I see VOWs as utterly useless. I do however appreciate what the ruling by the DOJ is attempting to do – eliminate group boycotts of non-members of a system. It’s certainly not a perfect solution but it beats MLSs telling outside entities that they cannot do business with their members.
CJ Johhnson
July 2, 2013 at 10:25 am
The issues in that we can not hold non REALTOR members to the same standard as REALTOR members and I have been on the opposite side of multiple transactions where I can’t even get a return call let alone any of my paperwork. I have no recourse. At least with a REALTOR member I can hold them accountable or competency under the code. It isn’t much of a solution but at least it is something.
Patrick Healy
July 2, 2013 at 10:40 am
Agreed. It’s “something”. But is this a trade association issue or a state licensing issue? To be honest, if the consumer knew that those people weren’t really doing their jobs then they could easily take action and simply fire them. Fear of that should help to regulate that behavior.
The notion that you as a REALTOR and a member of NAR cannot say anything to the non-REALTOR’s client is a code imposed upon you BY NAR not the person not doing their job. I’ve not seen this phenomenon occur in any other industry I have ever worked in.
Also, how many non-NAR members are out there that do the job right? How many NAR members do it wrong? I’m sure that changes by market but it’s far from a 0%/100% split I can guarantee that.
Joe Sheehan
July 7, 2013 at 12:24 pm
Which article of the code says I can’t talk to the non-REALTOR(r)s client?
Patrick Healy
July 8, 2013 at 10:25 am
I’d love to tell you you that Joe but as a non-NAR member I don’t actually have access to the COE. I do know that if the scenario was a pair of NAR agents doing business that one cannot directly contact the other’s client due to the COE. Perhaps it doesn’t always apply when non-NAR agents are involved. That would be very consistent and helpful. 🙂
Joe Sheehan
July 8, 2013 at 10:39 am
Article 16 of the COE says REALTORS(r) shall not engage in any practice that is inconsistent with exclusive representation of another REALTORS(r) client. Non-REALTORS(r) are owed no such duty as dictated by the COE. Of course, personal code of ethics should prevail.
Patrick Healy
July 8, 2013 at 11:27 am
So you are ok with that Article? If they are a fellow dues payer they get a higher degree of professionalism than other, state licensed, real estate professionals?
Joe Sheehan
July 8, 2013 at 12:38 pm
If they are a REALTOR(r) they are protected by the code of ethics. They are also bound to practice in accordance with the code of ethics. That is a benefit of membership. Non-REALTORS(r) may also file ethics complaints against REALTORS(r) but REALTORS(r) have no standing against non-REALTORS(r).
Patrick Healy
July 8, 2013 at 12:43 pm
Seems like there should be some state oversight over the rules that state licensed people play by, not a membership/non-membership thing. If everyone who is licensed to do business in a state has the same rights then they should all act accordingly. That’s my take. I know it’s not a popular one but, again, I’m coming at it from a consumer standpoint.
Joe Sheehan
July 8, 2013 at 12:51 pm
The states have laws. The COE is not law, We comply voluntarily. Also, their are contractual obligations on both sides, malpractice, errors & omissions, liability, any number of ways the consumer is protected.
Patrick Healy
July 8, 2013 at 3:03 pm
While I have do not have the time today to read and study the entire COE I am sure it all sounds fantastic on paper as long as everyone adheres to it. The opening statement of the Duties to Clients and Customers section says this:
“When representing a buyer, seller, landlord, tenant, or other client as an agent, REALTORS® pledge themselves to protect and promote the interests of their client. This obligation to the client is primary, but it does not relieve REALTORS® of their obligation to treat all parties
honestly. When serving a buyer, seller, landlord, tenant or other party in a non-agency capacity, REALTORS® remain obligated to treat all parties honestly.”
Now read back over some of these threads and tell me how pocket listings, dual agency, and private facebook groups releasing listings early to industry-only people adhere to that statement.
Joe Sheehan
July 8, 2013 at 10:49 am
By the way, how can you say the COE is huge problem in your comment above and in this comment say you don’t have access to it and don’t know what it says? On what do your base your opinion that it’s a huge problem?
Patrick Healy
July 8, 2013 at 11:26 am
On the basis of the conversations I have had with tons of people – including you! 🙂 One thing is that you cannot call another agent out on something they are doing when it’s wrong because you cannot “disparage another agent”. Well, if they are breaking the rules your only recourse is to file a grievance which is work and doesn’t get done as much as it should. THAT’S a problem.
Joe Sheehan
July 8, 2013 at 12:34 pm
The code of ethics doesn’t say that. Article 15 says REALTORS(r) shall not make false or misleading statements about other real estate professionals, their businesses, or their business practices.
One could make critical remarks about other agents but since most criticism is very subjective, how is that fair to the agent being criticized. We offer due process to complainants and respondents so they can offer their evidence to a fair and impartial panel. Seems like the most fair way to deal with any problems.
Patrick Healy
July 2, 2013 at 9:20 am
Any private system that disrupts a businesses’ ability to properly function if not participating in it can be and should be considered a corruption in the business ecosystem. I have heard of very few brokerages that can move real estate without participating in an MLS in an area where MLS participation is high – and they are mostly luxury.
Most MLSs are owned and run by local boards. They are used to generate revenue for those boards. If you do not join those boards they make it difficult to join those MLSs and even charge you more money to do so. This is a corruption.
The relationship between the board and the MLS is very much in conflict with the best interest of the consumer. The two really should be separate to attempt to maintain each of their integrities.
If this were not the case then there would a healthier environment and, although the industry would not like it, we would see more success on the FSBO front. The fact that FSBO is so hard to pull off speaks volumes to the integrity of that system. The fact that flat fee MLS brokers are so unpopular also speaks volumes to the integrity of that systems.
Joe Sheehan
July 7, 2013 at 11:05 am
What?!?! Patrick, amigo, I am glad you choose to use the word “arguably” because I will argue that point all day long. First of all, there are very few brokerages that choose not to participate in the MLS. They have their own reasons not to participate but the whole point of the MLS in the first place was devised by brokers, for brokers, so they could share their listings and share the fees paid by their consumer clients through what we call “cooperation”. There is nothing corrupt about that.
Second, most MLS’ are not owned by the local associations. They are stand-alone profit making entities that are governed by the shareholders who are typically the local associations. In some cases, the MLS shareholders are the brokers themselves. I am not aware of any non-dues revenue to any local association that is generated by the MLS.
Third, I don’t understand how getting the most eyeballs on the listing is in conflict with the interest of the consumer. What better way than getting your listing delivered every day to the fiduciaries of 95% of the real estate buying public, not to mention the buyers themselves, We call that “marketing” and “advertising”. The rules of the MLS apply equally to both REALTOR(r) and non-REALTOR(r) members alike. Yes, it is true, REALTOR(r) members pay less for membership. It’s a benefit of being a REALTOR(r). I pay less for toilet paper at Costco because I pay $100/year to be a member. That’s the benefit of membership.
You assume that the selling public has the time, the inclination, the know how, and the motivation to sell their home. Selling a home is something most people do 2 to 4 times in their entire lifetime. I agree, selling houses is not rocket surgery, but it does require some know-how and also a willingness to undergo the effort and the time and the risk. Remember, the seller doesn’t pay anything, typically, if the house doesn’t sell. If you die on the operating table, the cardiologist still demands his fee.
As for the flat dee brokers, unpopular to whom? As a real estate practitioner, I don’t care. Most of them are REALTORS(r). Most of them are MLS members. Why are they unpopular? Certainly, the industry doesn’t view them as such.
Patrick Healy
July 7, 2013 at 11:29 am
I think you and I are both very passionate on our views Joe, and that’s why I love you. From an outside perspective I see so many questionable practices that go on in this business that you may not be publically able (or sometimes willing) to recognize. And yes, I know that some of these happen a small percentage of the time by sometimes an even smaller percentage of the REALTOR population but the points I made are still withstanding. To address yours:
1) In most markets if you don’t participate in the MLS you cannot sustain your business. This is not up for debate or dispute.
2) With the exception of some of the big boys like MRIS, MRED, and TREND, from my observation, the other large MLS’ are owned by their respective associations one way or the other (HAR, CAR, FAR, LIBOR, GHVMLS or whatever they are now calling it). The associations need the money generated by the MLS to continue to do what they do. Maybe not in TREND country but surely in other areas. Maybe we can have a discussion about how we define ownership but the result is the same.
3) If I could, I would agree with you 100% on that however if what you said (and I do believe you believe it since I know you so well) was the sentiment of the industry then there would be no ZTR discussions. If the objective is to get as many eyeballs on the listing as possible – since it is just an advertisement (and it is, let’s get real about this) – then nobody would have an issue with any portals and you would be able to share any listing you wanted anywhere you wanted. Try posting someone else’s listing on your FB page and let me know how that works out for you. Meanwhile IDX is just that but don’t get me started.
4) Again, fundamentally I agree with you in theory but we both know in practice that’s not the case. Agents HAVE to show a consumer any home they want but for whatever reason they just don’t seem to show that many FSBOs. I have been dissuaded by agents in the past and given excused such as “there are better houses I can show you”. The fact is that it’s harder for them to get paid on those showings and frankly I don’t blame them. If there were a way for them to say “go there on your own” it would be great but there is no realistic provision in the system that’s in place.
5) Also FSBO’s not being allowed in the MLS in itself is anti-trust IMO. THAT’S why flat fee brokers that will put you in the MLS for $300 ARE indeed unpopular and I have heard them get trashed at conferences and even in online communities since I started in this industry. YOU are different Joe, you have sensibility and are confident in your abilities. You are not the norm. I can see it and I can say it since I am not bound to the COE. Sorry, I have you on this. 🙂
Don’t misunderstand my use of the word corruption in my earlier post. I am not referring to people on the take like mobsters with brown paper bags full of money. I use the term corruption here much like you would with computer code. There are fundamental problems in this system that prohibit it from working in everyone’s best interest. The COE is a huge problem IMO but that’s another conversation.
The fact that the entire industry is based on the closing of a deal is another with contingent compensation is a HUGE problem for me. I think it only leads to people chasing the closing and nothing else. We’ve spoken about this in the past and I know you know where I’m coming from. I speak for the consumer, not the industry at large.
Joe Sheehan
July 7, 2013 at 12:17 pm
1) In Philadelphia, one the most successful brokerages in the US and a member of NAR does not advertise their listings on the MLS.
2) I will concede this point because I don’t have access to financial statements of the associations you cite to dispute your claim. I know my local association is a shareholder of TREND and we do not benefit financially from that relationship.
3) I view all real estate portals as advertising portals and nothing more. I don’t agree that they undermine the value of the real estate professional, they in fact enhance it. Most of the information posted on portal sites is fed from the MLS. The code of ethics says a REALTOR(r) may not advertise another broker’s listing without permission. If the broker permits it, you can advertise just about anywhere. There is, of course, the issue of vicarious liability which might cause a broker to deny that permission. IDX on the other hand is an opt-in service. Brokers may choose not to participate in IDX feeds. Those that do participate, through their agreement with the MLS, express permission to advertise the listings on other sites as long as the IDX rules are observed.
4) The reason unrepresented properties may not get shown as frequently is because real estate agents are not likely to be aware of them. Article 3 of the Code of Ethics says I must cooperate with other REALTORS(r). Unrepresented seller’s are generally not REALTORS(r) so the obligation doesn’t exist. Nevertheless, if a buyer wants to see an unrepresented property, I will contact the owner and negotiate my fee in advance. If the seller is not willing to offer the compensation, the buyer, through his Exclusive Buyer Agency Agreement, is responsible for the fee if they wish to buy the property. Again, it’s not up to me to make the decision. I provide the facts and let the buyer decide. By the way, that is true of represented properties as well. I sometimes have to negotiate compensation with listing agents and sometimes my exclusively represented buyers have to make a decision based on the financing of the transaction.
5a) Finally, how can a private non-business entity make an argument of anti-trust? That makes no sense to me. Why should a private citizen be given free access to a service that I as a member have to pay for?
5b) In spite of whether the business concept get’s “trashed” in forums, REALTORS(r) are obligated to uphold the Code of Ethics in their day to day dealings. Perhaps the reason the discount broker is not as popular is because the consuming public doesn’t chose them for the same reasons I cited in my original response. Most seller’s don’t want to be involved in the minutiae of selling their own home. Or, they lack the skill and the know-how to get the deal done.
I’d be very interested in your explanation as to why the COE is a “huge problem”. It has only survived and guided the ethical behavior of REALTORS(r) for the past 100 years.
Patrick, all business is contingent of the closing of deals. Name one that generates profits otherwise. Isn’t that what capitalism and free enterprise is all about?
Joe Sheehan
July 8, 2013 at 12:40 pm
I am emailing you a copy of the Code of Ethics. It’s not a secret document. I wish you would read it before commenting on what it says.
Algernon Davis
July 2, 2013 at 6:40 pm
This made the headlines, and that is clearly the goal of the guy you interview here. Whether this actually adds any value to the client is debatable.
Based on what some folks in the DC area I know have said, I would bet that most if not all of the agents in that group were added by the creator, and maybe a handful of others added by those.
Leaving the home on the open market for several days in this sellers’ market is best for the seller, and that is a fact. Putting the home under contract on day one or two, after a small sampling of agents got a head start through facebook would just be plain stupid.
Again, this looks to be about publicity, not clients.
Miriam Bernstein
July 6, 2013 at 9:43 am
This is not leveling the playing field as it claims but taking a bad business practice of agents announcing new listings in their office and putting that bad practice on Facebook. If these listings are signed by the seller’s then put them on the MLS and let every buyer have a chance to purchase the property. If these are not signed listings the agent who posts them is not very smart as the property can be recognized by consumers and other agents who can just go direct. Most agents and buyer’s will not have a clue these sites exist and will lose out being hurt by this process; I don’t see the purpose and don’t believe this is in anyone’s best interests except for FranklyRealty who is perhaps gunning for a new income stream.
Patrick Healy
July 6, 2013 at 11:14 am
Agreed.
Joe Sheehan
July 7, 2013 at 11:15 am
In my view, if MLS agent members market, show, and sell listings that are not on the MLS, they are pocket listings. Pocket listings are not defined as listings where the agent “pockets” the commission. A pocket listing is one that the agent holds in his pocket (metaphorically) and shows only to a select segment of the market. Contrary to what many with whom I’ve engaged in conversation may think, I am not against pocket listings as long as the MLS rules are observed and followed.
Seller’s must be aware that accepting an offer on their property that has not had the exposure to entire marketplace may not be the best offer. I don’t care if they accept the offer or not. They should accept whatever they are happy with. The disclosure to and the awareness of the seller is paramount.
My duty as a real estate licensee and a REALTOR(r) is to provide advice, not make decisions for them. I am obligated to provide them with the facts so they can make decisions. That includes the perils of accepting offers that have not been exposed completely and fully to the home buying market.
Patrick Healy
July 7, 2013 at 11:34 am
I cannot think of a scenario where a pocket listing helps the seller or the buying community at large. I can however think of several scenarios where this practice can help the listing agent’s bottom line. I am definitely against pocket listings. Put it on the open market and see what you get. It may be more and unlikely be less.
Joe Sheehan
July 7, 2013 at 12:20 pm
Whether it benefits the seller or not is not the point. The seller has to decide that.
Patrick Healy
July 8, 2013 at 10:07 am
How does a seller who does this 3-4 times in a lifetime even know to ask this question? Lying by omission is still lying by most people’s standards.
Joe Sheehan
July 8, 2013 at 10:21 am
I would think it’s pretty obvious. Do you want to advertise your home where it will be potentially seen by thousands of home buyer prospects or would you rather advertise to the 300-400 people in my CRM, most of whom are not even looking to buy a home?
Patrick Healy
July 8, 2013 at 10:29 am
What percentage of home sellers do you really think could follow along with this thread?
Joe Sheehan
July 8, 2013 at 10:40 am
That is why home sellers should interview several REALTORS(r) before making a choice.
Patrick Healy
July 8, 2013 at 11:28 am
Agreed. But they don’t.
Joe Sheehan
July 8, 2013 at 12:28 pm
So you’re saying that’s my responsibility?
Patrick Healy
July 8, 2013 at 12:40 pm
No, I’m reinforcing that this is just part of the problem. People don’t know anything about the industry and the industry is doing nothing to rectify that. It’s a buyer beware environment and that’s why people feel the way they do about this business. It’s not a used car salesman’s job to make sure people know anything about cars or the process of buying one either. Is that where we want to be?
Joe Sheehan
July 8, 2013 at 12:45 pm
Just about everyone for whom I do a listing presentation says that they will be interviewing other agents. There are some who say they won’t but that’s because of my long relationship with them. They understand more than I think you’re giving them credit.
Patrick Healy
July 8, 2013 at 3:04 pm
Maybe I just know a lot of short sighted people. I dunno.