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The National Association of Realtors' proposed Clear Cooperation Policy is a crucial step toward ensuring equal housing access by limiting pocket listings, a practice that research shows disproportionately excludes minority homebuyers from opportunities. This policy would require most listings to be publicly marketed, creating a fairer and more transparent market for all consumers.
A pocket listing is a property for sale that a real estate agent markets exclusively within their private network, rather than submitting it to the local Multiple Listing Service (MLS) for all agents and the public to see. While proponents argue they offer sellers a discreet, low-pressure way to test the market, the practice severely limits a property's exposure. In markets like San Francisco, the share of homes sold as pocket listings increased by 68% between 2010 and 2018, signaling a trend that reduces overall market transparency.
The primary criticism of pocket listings is their discriminatory effect, even when discrimination is not the intent. Because these listings are shared through informal, private networks, access is often limited to an agent's established circle of contacts. Academic research, including a comprehensive year-long study by Professor Elizabeth Korver-Glenn in Houston, found that the social networks of real estate agents are often predominantly white. Consequently, homebuyers of color, immigrants, and outsiders are frequently the last to know about these opportunities or are excluded entirely. This reinforces segregated housing patterns and violates the principle of equal access to housing.
In response, the National Association of Realtors (NAR) proposed the Clear Cooperation Policy. This policy mandates that within one business day of marketing a property to the public, a listing broker must submit the listing to their MLS for cooperative marketing. This ensures the property is visible to a wide range of brokers and public-facing websites, not just a select group. The policy underwent review in late 2019 with the aim of nationwide implementation.
Opponents of the policy argue that "coming-soon" listings are valuable for building excitement before a home is ready for showings. However, the policy does not eliminate this marketing strategy. Instead, it advocates for transparency. Many Multiple Listing Services already support "coming-soon" statuses, allowing sellers to announce a property publicly with details on its upcoming availability. This approach allows for pre-marketing while ensuring the entire market, not just a privileged few, is aware of the opportunity.
The key takeaway is that early marketing and broad exposure are not mutually exclusive. The policy aims to break down information monopolies that some brokerages create by hoarding listings, ensuring a level playing field for brokers of all sizes and the buyers they represent.
For sellers, limiting a property's exposure through a pocket listing can deflate the pool of potential buyers, potentially leading to a lower final sale price. For buyers, the consequence is a fundamentally unequal marketplace. As the California Association of Realtors has cautioned its agents, the practice may not serve the seller's best economic interest and may have a discriminatory effect.
To navigate the market fairly:
The debate over the Clear Cooperation Policy is about more than industry rules; it's about upholding the real estate industry's foundational responsibility to ensure everyone can see all homes for sale. Achieving a truly open market requires an industry-wide commitment to transparency.
