The MLS dilemma: Resist — or join — the pre-marketing movement
While the Council of Multiple Listing Services has decried private listings, some MLSs have adopted policies that look a lot like Compass’ 3-phased approach.
Key points:
- CMLS, the trade organization for MLSs, published a statement in March critical of selective marketing, emphasizing that “complete, timely, and accurate listing information matters.”
- The message appeared to be directed toward Compass, which has leaned into private and pre-market listings.
- But several MLSs have long allowed for such marketing practices, potentially putting them at odds with CMLS, though their leaders don’t necessarily see it that way.
Editor's note: As brokerages and portals move to create their own rules around pre-market listings, MLSs are faced with a choice — follow the lead of their trade organization, which takes a clear stand against selective marketing, or offer flexible policies that accommodate the shifting marketplace. In part one of our three-part series Dividing Lines, we share the perspective of MLS leaders who are taking the more "brokerage-friendly" approach.
The industry is at an inflection point around how, where and when properties should be marketed.
While the rallying cry among many brokerages was once open access for all, today's brokers and agents are increasingly heading in a different direction that favors selective marketing first.
Meanwhile, MLSs are caught in the middle — left to create their own policies while brokerages and portals build new structures around them — but their trade organization, the Council of Multiple Listing Services, has already taken a clear stand.
In a statement released at the end of March, CMLS lambasted "large firms" spreading a "false narrative" about the benefits of exclusive listings for consumers and framing MLSs as organizations that "work against real estate professionals." While not naming names, the message appeared to be directed at Compass, a brokerage that has taken the lead on private listings, and whose CEO has harshly criticized MLSs for making rules that "interfere with your client relationships."
While CMLS and others in the industry may be pointing their fingers at Compass for setting off a chain reaction of sorts, the reality is that several MLSs have, for years, allowed listings to be pre-marketed or privately marketed. Others have recently expanded options for pre-marketing in response to shifts in the market.
The question is, does that conflict with CMLS's underlying principles? And how should MLSs, including those less inclined to permit pre-marketing, navigate this new territory?
The 'friendly' MLSs on board with pre-marketing
Compass International Holdings CEO Robert Reffkin has repeatedly called out a handful of MLSs for enforcing what he considers to be restrictive policies around pre-marketing, including Northwest MLS, which Compass sued last year over its private listing rules.
At the same time, Reffkin has praised several other MLSs for creating flexible "seller-choice frameworks" that allow brokerages to enter coming-soon and office exclusive or private listings.
Among those "brokerage-friendly" MLSs, according to Compass, are Bay Area Real Estate Information Services (BAREIS), Bright, Canopy, HAR, MLS Listings, MLS PIN, MRED, Realtracs, SFAR MLS, The MLS/CLAW and Unlock MLS.
Listing options mirror the Compass strategy
In speaking with executives from some of the MLSs Reffkin has highlighted, many consider their policies to be similar to Compass' 3-phased marketing approach.
Unlock MLS recently debuted a new pre-marketing program called Flex, which allows agents to enter a listing in the MLS without days on market or price changes being tracked until the listing is fully active. Like Compass, Unlock brands Flex as "a phased approach to entering the marketplace on behalf of the seller," where sellers can "start smart" as a Flex listing, "launch strong" with full syndication and "get to close" with less time on market than traditional listings.
"I can't speak specifically to [Compass's] strategy," Unlock MLS CEO Emily Girard told Real Estate News, but "in the same kind of likeness or spirit, there's opportunity to use Flex to test price, to get initial feedback from professionals and their clients on the listing before you go full-active."
Bright MLS has varying degrees of active and coming-soon listings, as well as an option for office exclusives, all of which line up with Compass' strategy — though the MLS's statuses were in place long before Compass launched its marketing approach.
"[Our statuses] allow them without penalty in our market to do their 3-phased marketing plan. And at some point, if everybody's got a private exclusive, then it's no longer really private, is it? So maybe these things have a way of working themselves out," Bright MLS CEO Brian Donnellan told Real Estate News.
Hud Bixler, chief information officer at the San Francisco Association of Realtors, said he didn't think the association's MLS was "that far apart" from Compass, adding that SFAR's members "would be very vocal if our process wasn't working for the market."
'Transparency and context are not in conflict'
Some MLS leaders were hesitant to say whether their policies were in conflict with CMLS's stance on selectively marketed listings.
However, Unlock did say that the display of market information — such as prices changes and days on market — should be done with more caution when listings are in a pre-market or private status. Those listings "exist outside the traditional public market timeline by design" because they are often still being prepared for market, Girard noted in an email.
"The complete picture lives within the MLS, where full listing history and context are preserved," she said. "That context is critical and is best interpreted with the guidance of a licensed professional who understands the nuances behind a listing's timeline, preparation and market readiness."
"Transparency and context are not in conflict, but one without the other does not fully serve the consumer," she added.