More Than A PR Problem

Feb 9, 2008  |  Michael Wurzer

Following some conspiracy theory discussions I had this week with a colleague about the NFL (yes, he’s a Patriots fan), I found the comments to this post on SockedSite to be amazing. A home was listed for sale in San Francisco but was not put on the MLS, and several commentators (starting with the ninth comment) presumed that the reason it was not listed on the MLS was because the agents were conspiring to keep the inventory low in the MLS to keep prices from going down further:

To answer arlo’s question, the rationale is what I listed above. If the brokerages listed every home that was for sale right now, the prices of all homes would drop. And the two dominant brokerages tell the sellers that they can communicate to most of the buyers without the MLS anyway: it’s such a small community that there are other ways around the MLS.

Get this through your head: The MLS is a marketing tool that exists only to serve the interests of the realtors. It is NOT a public service. If the Realtors’ interests are served by misleading the buyers, then that’s how they are going to use it. Plain and simple.

Perhaps some education or better public relations could inform conspiracy theorists like these that such manipulations are not possible in the MLS, because the rules require members to submit every listing unless the agent provides a written request from the seller not to be listed. However, I don’t know that PR or education will ever overcome this negative attitude. What do you think? Is this type of conspiracy theory thinking common or crackpot? Is there anything that can or should be done to address it? Would it change if the MLS were more open to consumers? What would or could that look like?

3 Responses to “More Than A PR Problem”

  1. Kevin Boer says:

    Excellent conspiracy theory, right up there with the two figures on the Grassy Knoll, and the story that JFK and Marilyn Monroe actually killed eachother!

    If withholding properties from the MLS is somehow a way of holding up sagging property values, how come this method hasn’t been adopted by every market? Perhaps — gasp!! — not every market is tanking; perhaps some markets may actually have low inventory?

    Whenever I come across a home that’s for sale, but not on the MLS, it tends to be one of two things:

    1) Owner wants privacy — happens most often in the upper market. These transactions tend to take place between clients of the top high-end brokers in that particular area.

    2) Listing agents wants to double-dip — Classic scenario is this: listing agent convinces seller to put home on the market, but under market value. Agent “forgets” to put home in the MLS, at least for a week. Advertises the heck out of it for the first open house in the newspapers, Craigslist, etc. Result: No other agents know about it, so they’re not sending prospective clients over to see it. Many of the open house visitors will be unattached buyers and voila! you double-end it.

  2. Old Broker says:


    No not all MLS’s still require this 1950’s rule as it is a business practice. If it is in your board, demand a ruling from NAR – it’s your right. No local board can mandate how any agent or broker can conduct business or what type of service can or cannot be offered. NAR has made many rulings on this (shockingly) understanding that this is anti-competitive. The very requirement of an “opt-out” form pre-supposes that only only “correct” way to sell a home is on MLS. The bottom line is that a FSBO priced correctly, clean and in good condition, will sell in any market – just as an MLS listing priced correctly, clean and in good condition, will sell in any market.

    As for is it good or isn’t it good. MLS is just a good tool not a miracle cure. It was “invented” to help sell inventory that wasn’t moving as if houses were a commodity. Houses are not commodities and as such can garner something of a captive audience. Buyers do drive areas they are interested in and will get in to see a correclty priced home whether the broker wants to show it or not.

    To assume that exclusive listings by an agent or broker is going to garner the same amount of commission as some mls brokers, thereby allowing a slick and trouble free “double-end” is incorrect.

    Brokers don’t have to show fsbo properties or even ask to show exclusive listings – as if their buyer would pay the commission. It’s no big deal. FSBO’s aren’t evil, nor are MLS-only agents. If either is your choice then so be it. Either way I hope you or the homeowner prospers.

    Our industry grew out of true brokerage, as in one broker – two principles. Frankly, as bad as most agents are at transactions, I prefer not having to deal with an agent who will (not might) screw up their part of the deal.

    Most likely what is happening with this particular market is that agents have jumped on YABW. “Yet Another Band Wagon”. Agents and Brokers generally don’t have a direction of their own. And when faced with a “trend” they will happily jump over a cliff as long as they have company.

  3. It is a more than a little far fetched to think that agents can organize a “conspiracy” to withhold listings from the MLS in order to protect prices from going down further. Like most business people, agents are self-serving and will do whatever it takes to maximize their chance of getting paid. Usually this means putting the house on the MLS.