Another state joins the handful that have opted to restrict private real estate listings, a move that itself reflects a larger conflict within the industry.
Weeks after Compass and Illinois-based MLS Midwest Real Estate Data (MRED) announced plans to take the latter’s private listing network nationwide, Connecticut Governor Ned Lamont has—as of May 27—signed into law a real estate reform bill passed by the state legislature earlier this month.
A key provision of this legislation is a mandate that listings in Connecticut be publicly marketed. The bill does not prohibit the use of private listing networks, but mandates if a listing is added to such a network, it must also be marketed on a public platform whether that be an MLS, a website, etc.
The text of the bill specifically reads that an agent or a broker representing a seller or a landlord in a real estate transaction “shall, concurrently with, or prior to, the first instance of public marketing, make such residential property available to the general public on a fair, nondiscriminatory and publicly accessible listing platform that is reasonably designed to generate broad public exposure to prospective buyers or tenants.”
The only exception is if the seller or landlord signs a specific form to opt out of public marketing, with that document saying that the choice could result in negative consequences—from a lower sale price to longer time on the market.
Connecticut does not stand alone here. Other states such as Washington and Wisconsin have previously passed functionally similar laws applying to real estate listings within their states. New York state is also considering passage of such a bill, which as of Monday, June 1 has been passed by the state Senate.
The text of the New York bill calls for agents or brokers to “publicly advertise or market the seller or landlord’s property for sale or lease, at a minimum, on one or more multiple listing services for distribution and display on the multiple listing service participant or on one or more internet platforms or websites,” specifically internet platforms that do not require payment or a consumer to work with a brokerage to get information.
As with the other state bills, the New York bill allows sellers and their representative broker/agent to submit an opt-out form that allows the listing to not be publicly listed. The text of the boilerplate form is included in the bill; it specifically asks if the seller is aware that no public listing may reduce visibility or result in a lower sales price, and if the seller is aware that discrimination of any protected classes is prohibited.
New York real estate leaders who spoke to RISMedia about this legislation in April either voiced support, such as Brown Harris Stevens CEO Bess Freedman, or remained neutral.
MLS leaders from states that have passed/are considering passing these private listing restrictions also generally spoke positively about these bills/laws to RISMedia, including Michael Barbaro of Connecticut-based SmartMLS. “We like the bill. We think it needs to go a little bit farther. We don’t think it goes far enough, but it’s definitely one of the stronger bills I’ve seen across the country,” said Barbaro in May before Lamont had signed the bill into law.
