Yes, a licensed real estate agent may show a house before it is formally listed on the public market. This practice is governed by strict industry regulations and requires specific written agreements with the seller. The ability to conduct these showings depends entirely on the type of listing agreement in place and whether the agent intends to publicly market the property outside a private, internal network. Navigating this process demands that the agent adheres closely to Multiple Listing Service (MLS) rules and their professional obligations. These specialized showings introduce a layer of complexity for all parties involved, requiring careful attention to the rules of market exposure and transparency.
Understanding Pre-Listing Showings
A pre-listing showing refers to any instance where a prospective buyer views a property before it has been entered into the MLS database as an active listing available for general cooperation. These showings differ significantly from standard appointments because the property is not yet exposed to the wide network of agents and buyers that the MLS provides. This practice often involves what is known as an “off-market” sale, where the property is intentionally kept away from the public eye.
A common term associated with this practice is the “pocket listing.” This describes a property for which a broker holds an Exclusive Right to Sell agreement but has not yet submitted the listing to the MLS. The agent markets the property selectively, often only within their own brokerage or to a small, pre-selected group of clients. Pocket listings rely on the seller instructing the agent not to enter the home into the broader database. They are distinct from properties that are temporarily being prepared for a standard listing.
The Clear Cooperation Policy and MLS Requirements
The National Association of Realtors (NAR) established the Clear Cooperation Policy (CCP) in 2020 to address the rise of off-market listings and ensure wide market access. This policy mandates that if a listing broker publicly markets a property, they must submit that listing to the MLS within one business day for cooperation with other participants. The policy aims to promote cooperation among agents and maximize property exposure for the consumer.
Public marketing is defined broadly. It includes displaying flyers, placing yard signs, digital marketing on public websites, email blasts to a wide audience, and sharing the listing in multi-brokerage networks. Showing a property to a single buyer is generally considered a private communication, but showing it to multiple parties or advertising the availability for showings to the public triggers the one-business-day submission rule.
To keep a listing truly off-market without violating the CCP, the seller must sign an Exclusive Right to Sell agreement. They must also execute a specific form waiving MLS entry and restricting all public marketing. The agent must limit communication to one-on-one conversations with clients or internal marketing solely within the listing brokerage. Failing to adhere to these requirements can result in disciplinary action against the agent by their local MLS organization.
Why Sellers Choose to Show Before Listing
Sellers often allow pre-listing showings to preserve their personal privacy by limiting the number of people who enter their home. This helps them avoid the disruption of numerous open houses and scheduling conflicts that accompany a fully active listing. This strategy allows the seller to restrict viewings to only the most serious, pre-qualified buyers whose agents are known to the listing broker.
A seller may also use a soft marketing approach to discreetly test the market price before fully committing to a public listing. If initial feedback suggests the asking price is too high, the seller can adjust the strategy without creating a public record of a price reduction. Conducting pre-listing showings can sometimes lead to a fast sale, potentially securing an acceptable offer without incurring the full costs and effort of extensive marketing. This reduces the time the home is officially on the market, which is appealing to sellers who prefer a rapid transaction.
How Buyers Benefit and Face Challenges
For buyers, gaining access to a pre-listing showing offers the benefit of exclusivity and a reduction in competition. They receive the opportunity to view and potentially secure a property before it is exposed to the broader market, which translates into a smoother transaction process. Securing a home this way is advantageous in a fast-moving market where homes often receive multiple offers immediately upon listing.
However, a buyer viewing an off-market property often faces the challenge of limited market transparency. Since the property has not been exposed to the entire pool of potential buyers, the buyer risks overpaying. This occurs because there is no competitive bidding process to establish the true market value. Without the full breadth of market exposure, the buyer cannot be certain that they are securing the best possible price.
Ethical and Fiduciary Duties of the Realtor
When handling pre-listing showings, the realtor operates under a fiduciary duty to the seller. This means they must always act in the client’s best financial interest and strive for the best possible price and terms. The agent must fully inform the seller that limiting market exposure through pre-listing showings might limit the number of offers received. This could potentially result in a sale price lower than what a competitive bidding environment might produce.
The agent must carefully document the seller’s informed consent to limit the marketing. This confirms the seller understands the trade-off between privacy and price maximization. This documentation is necessary to protect the agent’s professional standing and demonstrate adherence to ethical standards. Agents must avoid “steering,” which occurs when they favor a specific buyer over the seller’s interest in achieving the highest sale price, particularly in dual agency scenarios.
Other Marketing Strategies Before Full Listing
A regulated alternative to a true pocket listing is the “Coming Soon” status. Most MLS systems permit this status for a short, defined period, often between 7 and 21 days. Unlike an off-market sale, a Coming Soon property is immediately entered into the MLS database, satisfying the Clear Cooperation Policy requirement. This status allows the agent to generate interest and prepare the property for its official launch while signaling that the home will soon be available.
Most local MLS rules prohibit physical showings during the Coming Soon period until the listing status changes to “Active.” This rule ensures that all buyers and their agents have an equal opportunity to view the property once it is fully available to the public. Some brokerages also maintain private, internal networks of agents who share “office exclusive” listings only within that single firm, which is permissible under the CCP as long as no public marketing occurs.