6. Deterioration of Reported Information
MLS sales are reported to the public when they are dissimilated on other websites. These sites then can create graphs showing trends in a particular market, and provide quality information for comparable sales. Engaging in pocket listings removes a certain number of properties from the market, which can deteriorate the information provided by these websites. This can have an adverse effect on the entire industry.
It seems that it is a rare occasion where a pocket listing would actually benefit a seller. Agents should be extremely cautious in dealing with pocket listings, and Associations of REALTORS® should consider creating advisories that agents can provide to sellers explaining all the risks of a pocket listing so that the agent can demonstrate that he obtained informed consent. Agents should be particularly careful when dealing with elderly sellers.
Fredric W. Trester is a partner in the law firm Manning & Kass, Ellrod, Ramirez, Trester LLP in Los Angeles, Calif.
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