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Compass CEO Robert Reffkin has made exclusive listings central to the company’s business strategy. But the Clear Cooperation Policy (CCP), of which he’s been a vocal critic, is an obstacle toward that strategy.
While the debate over CCP has gotten increasingly heated, Reffkin may already be winning the war against the CCP.
In his opening remarks during Compass’s fourth-quarter 2024 earnings call on Tuesday, Reffkin said that almost half of the markets the brokerage operates in have stopped enforcing CCP, a rule implemented by the National Association of Realtors (NAR). Recent data suggests Compass is rapidly expanding its inventory of exclusive listings.
“Since NAR’s revenue model is based on the number of agents in the industry paying dues, I believe they don’t want large brokerages and top agents to gain market share because it would result in less agents in the industry and less revenue from agent dues,” Reffkin said on the call.
Whether or not revenue is NAR’s motive for CCP, real estate industry players predictably take whichever side serves their business interests. CCP makes it difficult for brokerages to acquire exclusive listings because the rule requires Realtors to advertise a home on a NAR-affiliated MLS within 24 hours of signing a listing contract.
That 24-hour window doesn’t provide much benefit to a brokerage pursuing exclusive listings. Conversely, MLSs and portals that benefit from a near comprehensive inventory of listings don’t want that inventory to shrink because of exclusive listings.
Regardless, data compiled by consultant and academic Mike DelPrete shows substantial growth for Compass’s exclusive listings — which the brokerage calls Private Exclusives. Since July 2024, its Private Exclusives have grown by 150%, and the share of all Compass listings that are exclusives now tops 30%.
Reffkin argues that CCP limits “sellers’ choice” by forcing them to advertise on an MLS. But proponents of the rule say that listings that are walled off on a brokerage’s site don’t get as much exposure to homebuyers and thus don’t sell for as much as they would if they were on an MLS.
Zillow — which has skin in the game as well — published a study last week which concluded that homes not advertised on an MLS sold for roughly $5,000 less, equating to a 1.5% decrease on the national median sale price.
The data also suggests that the impact is greatest among the lowest-priced homes. Zillow separated homes into five tiers by price, with the bottom tier seeing off-MLS listings sell for 3.1% less and those in the next lowest tier sell for 2.7% less.
The future of CCP is cloudy. NAR held meetings about the rule last year, but the trade group has not yet rendered a judgment on it one way or another. In the meantime, fierce arguments about it will continue to proliferate on LinkedIn and other social media platforms.
In the fourth quarter of 2024, Compass reported a 26% year-over-year increase in revenue and a 24% increase in closed transaction sides. While the firm’s revenue grew to $1.4 billion from October through December, it continued to run in the red. Its GAAP net loss for Q4 2024 was $40.5 million, down from a net loss of $83.7 million in the final quarter of 2023.
Compass also grew its national market share by 65 basis points during the year ending in December, grabbing a 5.06% share of all home sales in Q4 2024. Its agent count continues to rise sharply, as the number of principal agents grew from 14,683 at the end of 2023 to 17,752 at the end of 2024.
