From the San Jose Mercury News:
According to MLS Listings, off-MLS activity in the counties of San Mateo, Santa Clara, Santa Cruz, San Benito and Monterey, the five-county area the MLS serves, represented 21 percent of total home sales in 2013, up from 15 percent in 2012, and 12 percent in 2011. By sales volume, this accounted for $4.8 billion of the 2013 market share in the five-county area.
Harrison noted MLS Listings Inc. is, in fact, “the largest private listings club in Northern California,” with more than 16,000 subscribers/members who are qualified licensed brokers/agents and abide by rules of the National Association of Realtors and the California Association of Realtors. The MLS has agreements with other California MLSes to share property and listing information representing about 21 counties and more than 65,000 subscribers, so agents’ listings get the best exposure.
Trailer said when he launched Producers Forum in 2011, he intended it to complement and not compete with the MLS. “It was intended to answer the wants and needs of agents, which the MLS didn’t provide,” said Trailer.
Producers Forum currently has 1,600 members who are licensed real estate professionals from around California, Nevada and Oregon. Trailer said the private listings club leverages agents to provide specific information about buyers and off-MLS sellers. Buyers are vetted by members.
Studies show properties in the MLS receive a higher price than those sold off MLS, from 5 percent to 17 percent more. Trailer did not directly contest this finding. Instead, he noted the main reason given for not marketing a property in the MLS is convenience, not price. Sellers may not want to go through the typical property marketing preparation process.
“This was a surprise to me, but it says a lot,” said Trailer.
Another reason given for off-MLS listings is sellers value their privacy and do not want information about their home widely distributed on the Internet, to which Harrison countered that MLSListings does not require agents to post listings in the Internet, nor does it require agents’ listings to be syndicated. Sellers worried about security can limit exposure of their home and show their home to buyers whenever it is convenient for them.
Realtors in the audience continued to question Trailer on how agents can fulfill their fiduciary duty to their client if they don’t expose a property to every possible buyer, especially at a time when inventory is scarce.
“With multiple offers, a seller could receive the best price and the best terms. To not test the market in such a sellers’ market as we have today would not be in a seller’s best interests,” remarked one agent.
Trailer insisted the agents in the Forum are fulfilling their fiduciary duty to their clients because they are abiding by their clients’ wishes.