Trying to Keep the Playing Field Level

“As you are no doubt aware, allowing a showing on your listing while it is in TNAS (Temporarily Not Available for Showing) status is a NorthstarMLS rule violation. We have changed the fine for this violation to the List Agent from $100 to $1,000. This reflects its more serious nature and brings it in line with the $1,000 fine amount that is already in place for showing a listing while it is in Coming Soon status.”

–Northstar MLS (May 3, 2019).

[Editor’s Note: The views expressed here are solely those of Ross Kaplan, and do not represent Edina Realty, Berkshire Hathaway (“Berkshire”), or any other entity referenced. Edina Realty is a subsidiary of Berkshire.]

While I applaud the MLS’ decision to increase the fine for showing TNAS listings, I doubt that — even at $1,000 — it’s a sufficient deterrent.**

That’s because the payout commission (offered to the Buyer’s agent) on even an average-priced Twin Cities home is significantly more.

Buyer’s Agent Commission Math

Assuming a $250,000 home offering a 2.7% payout, the Buyer’s agent stands to pocket $6,750 on a consummated sale (at least before their broker takes a cut — in some cases, as much as 50%).

Which leaves two other calculations for listing agents tempted to look the other way on allowing TNAS properties to be shown — or to do so themselves: 1) what are the odds that the showing will result in a sale?; and 2) what are the odds of being caught?

My answers: 1) usually only 10% — but potentially much higher depending on the home and specific Buyer; and 2) virtually nil.

All of which argues that, when it comes to keeping TNAS and “Coming Soon” properties from being shown, if MLS truly wants to assure a level playing field for all Buyers, a better strategy than deterrence is simply banning dual agency.

**Wanna guess who’s improperly showing the TNAS home?

My gut tells me that the majority of the time, the Buyer’s agent doing the showing is also the listing agent — a practice known as “dual agency.”

See also, “Perils of Dual Agency, Exhibit A“; ““Dual Agent” vs. “Double Agent”“; and “Bell Curves, Home Showings, and the Odds of Getting an Offer: Why Home Sellers Shouldn’t Get Too Excited About a 1st Showing.”

And: “Deciphering “TNAS” in the Twin Cities Housing Market Now“; “Is That, “TNAS-There’s-a-Deal?” Or, “TNAS-the-Plumbing-Sprang-a-Leak?“; and “TNAS” Scenarios.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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