Christopher
O. Ashe, REALTOR®
Christopher
O. Ashe, REALTOR®
by
By Christopher O. Ashe
As I
travel around the state teaching and consulting I hear a lot of anecdotal
information about the fact the “in-house/private” listings are on the rise
and a lot of complaining that they are illegal and unethical. I thought that
because of the concern, it might be a good time to take a good look at this way
of doing business.
What
do we mean by an “In-house/Private listing?” This kind of listing occurs
when a seller directs their listing agent not to place the listing on the
Multiple Listing Service and, in some cases, not to share it with other agents
in any way. (Our MLS officially refers to them as an “Office Exclusive”;
other MLS systems may use a different term.) Other agents only find out about
the listing when they see an advertisement for it or a yard sign in front of the
house. When they call the listing office they are told that it is private or
in-house listing. In some instances the listing agency will agree to share the
listing and some times they will not, instead offering a referral fee or even
offering no cooperation or compensation.
Why
would a seller choose to have this sort of listing? There
could be several different reasons a seller would prefer this type of listing.
One reason would be privacy. A seller could be concerned by the thought of lots
of people they don’t know wandering through their home. This might be
especially true where there a lots of valuable items out in the open where
someone might pick them up. In the
case of a celebrity client they wouldn’t want curiosity seekers wandering
through their home and would hope that having just one agent involved would
solve the problem. Another reason
for using a private listing would be to save money. The listing agent tells the
seller that if they are the only agent involved they will charge a lower fee and
thus save the seller money at closing. Another
reason is that the seller believes that their agent is the only one that can
locate the right kind of buyers for their property; for instance the property in
question is a working horse farm and the agent is a specialist in horse farm
properties.
Is
this type of listing illegal?
No, not if it is done correctly. Section 20-328-2-a(h) of Connecticut
License law says “In the sale or lease of property which is exclusively listed with a real
estate broker pursuant to an exclusive right to sell or lease listing or an
exclusive agency to sell or lease listing, the broker shall cooperate with other
real estate brokers upon mutually agreed upon terms when it is in the best
interests of the party or parties for whom the broker is acting.” In
other words the license law says that real estate agents MUST share their
listings with other brokers unless they
can demonstrate that not sharing would be in the client’s best interest. As
mentioned in the previous paragraph there can be some good reasons that a seller
would choose to use this type of listing thinking it was in their best interest.
Having said all of that, there are a couple of very important points that the
real estate agent should be aware of. The first is that this decision is the
seller’s to make; it is not up to the listing agent to decide not to share the
listing. There is a perception that the primary reason these listings get used
is the greed of the listing agent who wants to keep control and commission all
for him or herself. The agent acts as if they are doing the seller a big favor
and protecting their interests when all they want is to keep the whole pie for
themselves. If that is the case it would be a violation of
Disclaimer
- Please Read!
Copyright 2004 Superior Design
All rights reserved.