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Posted by Danielle Dani Purcell on Friday, April 5th, 2013 at 8:57am.

REALTORS® Must Properly Handle Pocket Listings

C.A.R. has heard numerous reports about properties being sold as pocket listings without cooperating with buyers' agents. This practice, if not handled properly, may expose the listing office and agent to unnecessary liability and other serious consequences.

An off-MLS or pocket listing is generally a listing agreement that the listing broker does not disseminate in the local Multiple Listing Service (MLS) to which he or she is a broker participant. This practice may run afoul of the MLS Rules which generally requires a broker participant to submit to the MLS all listings for one-to-four residential units and vacant lots located in the MLS service area (Model Rule 7.5).

For a listing agent to arrange for a pocket listing to bolster the listing office's own compensation and disregard the typical seller's interest to procure the highest and best offer is very likely to be, among other things, a breach of the listing broker's fiduciary duty to that seller. If, on the other hand, a listing agent fully discloses the consequences of not disseminating a listing in the MLS, a seller may voluntarily opt to forego the market exposure afforded by the MLS. In that instance, the listing agent should obtain the seller’s informed consent to exclude the listing from the MLS (C.A.R. Form SEL), and timely submit it to the MLS to avoid potential liability, including legal, ethical, MLS, and licensing violations.

C.A.R.'s Legal Department provides the following resources for REALT0RS® dealing with pocket listings:

  • Pocket Listings Q&A: New legal article addressing the legal and practical issues involving pocket listings including breach of fiduciary duty, ethics violations, and fair housing and antitrust issues.
  • “Demand That Offer Be Presented to Seller” (DPO) letter in the C.A.R. Sample Letter Library through zipForm® 6: A buyer's agent may use this letter to encourage a listing agent to present the buyer's offer to the seller.
  • For more information, you may consult one-on-one with a C.A.R. attorney through our Member Legal Hotline at (213) 739-8282, Mondays to Fridays, from 9 a.m. to 6 p.m., and Saturdays (transactional questions only) from 10 a.m. to 2 p.m.

Hope You Found This Information Helpful!

Thank You,

Danielle Purcell
Team Laguna Real Estate

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