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The National Association of Realtors on Monday approved a policy that would essentially put an end to so-called pocket listings, the practice of shopping real estate listings privately, without posting them on a Multiple Listing Service for the public to see.
Many brokerages and real estate agents have been quietly marketing homes only on their websites or through emails or phone calls before they ever upload them onto centralized websites known as the MLS or multiple listing services.
Has this been contributing to segregation in Houston? According to the Houston Chronicle, the level of racial segregation is high and has remained largely unchanged over recent decades.
“White agents work overwhelmingly with other white individuals. And to the extent that they’re advertising within their own network, they’re disproportionately excluding people of color,” said Korver-Glenn, who published a paper with her findings in the Southern Sociological Society’s journal, Social Currents in 2018.
Many Realtor Associations have warned that pocket listings risk running afoul of antitrust laws and the Fair Housing Act.
Some brokerages have a really high number of pocket listings such as Compass Realty where this week in the Houston region they have 83 listings that were not listed yet on the MLS.
Compass has moved aggressively to defend the practice. When an MLS in the Mid-Atlantic region instituted a policy similar to the one proposed by NAR, the company wrote a letter threatening to sue the MLS for damages including lost exclusive listings if the policy was enforced.
The rule goes into effect Jan. 1, 2020, but MLSs will have until May 1st to fully adopt the policy.
Penalties are to be defined by each local association. The fine for noncompliance in the Washington, D.C., area, which implemented a similar policy last month, is $5,000.
“I think it’s a victory for fair housing, because pocket listings allow me to exclude who I want to show that property to,” Shadrick Bogany, a Houston agent and former HAR chairman said. “If it’s a pocket listing and I’m trying to keep River Oaks white, I’m not going to show it to anybody of color.”