Off-Market Listings: How does Clear Cooperation affect you?

Today we’re going to discuss the Clear Cooperation Act that applies to all Texas realtors. It used to be that networking to find off market properties was a large responsibility for US realtors, but some new legislation has largely changed that. We want you to be in the know - so breaking down the Clear Cooperation Act will help you understand how the Texas real estate market has changed and what that means for you. Our goal is always to help you find the perfect home, so it's important that you understand this change. 

What is the Clear Cooperation Act?

The Clear Cooperation Act is a legislation that mandates within one business day of marketing a property to the public the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes, but is not limited to, flyers displayed in windows, yard signs, digital marketing on public facing websites, brokerage website displays, digital communications marketing, email blasts, listing sharing networks, and applications available to the general public.

In layman's terms, any public advertising means that a property should show up in the MLS within one business day. For those of you that don't know what the MLS is, it is the Multiple Listing Service and it’s an online database that only realtors licence holders have access to. The second that a realtor makes a property live it is instantly seen on the MLS. Websites such as Zillow, Realtor.com, or Trulia, are pulling their feeds from the MLS; making the MLS the primary source of data for everything regarding property in your area.

What does the Clear Cooperation Act mean?

First of all, this means that we cannot as realtors, discuss or advertise properties to other agents outside of our brokerage, which dramatically decreases the amount of properties that, in theory, should be sold off market. A huge part of our job was trying to get properties before they came to the general public and typically that meant that you could get a better deal before it went to the market. You didn't have to compete with many people. Since many people come to us and ask how good we are at finding off market properties, it is now our duty to share that it is largely illegal to find off market properties. 

We even can be fined for posting in a Facebook group about an upcoming property that isn't in MLS. We are literally not allowed to advertise to the public in any way without putting it in MLS within twenty four hours. The first fine is around $1,000 and after three strikes we can lose our license. So the second we put a sign in the yard, the clock is ticking to kind of get the property offloaded and make sure that it's in the MLS. 

Why was the Clear Cooperation Act put into place?

This law only applies here in Texas and the governing body for the Texas Real Estate Commission, are looking closely at fair housing laws. They want to make sure that all consumers are getting equal treatment, so this is really considered pro consumer legislation, even though it's a big change in the market. It just means when you're looking for a house, you should have access and information about all of the properties that are available. There shouldn't be a kind of a niche market of properties that are only available to those that are in the know about them. This should be on the platform that everyone is looking at, all the property should be available and so no one network has an advantage over the other.

How to make the Clear Cooperation Act work for you?

We have our license through a large brokerage that has about 350 other agents and every listing we have is actually our broker's listing. What this means is that we can legally share off market listings with other agents in our brokerage. Working with an agent that belongs to a large brokerage now has a huge advantage! They may have an opportunity to see things that just aren't on the market yet. Sellers still have the option to keep their listings as a “pocket listing” and keep it only within the brokerage they are working with. Some people do that due to privacy, such as celebrities or people nervous about others coming through their homes. There are reasons that people sell off the market, however statistics show that they sell for about 6% to 20% less than they would on the market.

While this is great exposure for sellers, it adds to the already competitive buyers market. The good news is that it’s estimated nearly 40%-70% of properties were being sold off market, which means there is going to be a significant change in the amount of properties that are available and it should level the playing field for all buyers! There will also be a “coming soon” feature added to the MLS with homes that you won’t be able to see on websites such as Zillow for 30 days. This will give your agent a good heads up of properties before they hit the market and hopefully get you in for a showing as soon as the property becomes live. We really feel as though the pros outweigh the cons here. 

Navigating the Clear Cooperation Act

We’re still learning more and asking questions about this change, so we more than understand that you would have questions about what this means and how this works. If you do, please reach out to us. You can find our contact info and reach out through where welivepodcast.com, or feel free to jump into our private Facebook group Where We Live on Facebook and start a thread there with a question for everybody else's benefit.

All you need to know is that we're here as your agent to help you navigate this! We don't want to lose our license either, and we want you to get the best house for you. We hope you learned something today! The real estate market is always changing and we want to be your resource for the most up to date information.

Until next time,

Brianna and Keelie