The Colorado Real Estate Commission (CREC) released a position statement on December 13th (CP-36) stating that Colorado real estate licensees may not sell their access to the MLS without also providing additional services. These include presenting and negotiating offers & communicating with all parties throughout a transaction.
Some real estate agents have chosen to sell their MLS access to homeowners who don’t want to pay for a full service listing agent – primarily FSBO’s (For Sale By Owners). These agents would pop your home into MLS for a flat fee and notate your listing as “entry only”, meaning all offers, showing requests, etc should be submitted directly to the seller. The listing would include the sellers contact info and the agent’s work was done. By being in MLS, the seller now had a way to be listed in MLS and gain wide exposure because MLS listings are syndicated to realtor.com and many other sites. Homebuilders are also notorious for hiring an MLS member to input their inventory homes in MLS since their sales staff often is not licensed and do not have MLS access.
In CP-36, the CREC said, “A broker is not allowed to solely perform ‘additional’ services which require a real estate license… without providing the minimum duties required by single agency or transaction brokerage.” Inputting in MLS is actually one of these “additional services”. The minimum duties required as a broker are:
Presenting all offers to and from Seller – This means all offers and negotiations have to be conducted through the listing broker. No more putting the sellers contact info in MLS and bypassing the agent.
Advising Seller regarding the transaction – This sounds pretty self explanatory, but often the entry only agent would pop it in MLS and forget about it until it expired. Now, the agent must be coordinate the transaction and advise the seller.
Accounting for all money received – This means the agent is responsible for earnest money and the final settlement.
This is a good thing for the industry and for sellers. Why? Just being in MLS doesn’t get a home sold. In fact, it hurts you if there isn’t professional marketing that compliments the listing. How can it hurt? Well, the time on market is a death sentence for sellers, and if your home shows 150 days on market (for example) then even if you hire a full service agent at that point, the time on market will still show as 150 days. Buyers automatically think “What’s wrong with this house” and often offer less because they think you are now desperate. What gets a home sold is a listing agent whom actually “sells” the home, highlights the features and benefits, and connects with interested parties to build their interest and close the sale. We are licensed professionals and have a duty to help and advise the public with our expertise and skills. Entry only dilutes the professionalism of our industry and lowers the level of service (and results) for consumers. 90% of the time they ended up hiring a full service broker after it didn’t sell as “entry only”. Now brokers will (GASP!) have to actually do work for their sellers and cannot simply make a markup on their MLS membership. A good thing for the industry, a great thing for consumers! Sorry for the sarcasm but I’m passionate about this one!