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After taking some time for “thoughtful consideration,” Realtor.com has taken a stand in the debate over the National Association of Realtors‘ (NAR) Clear Cooperation Policy (CCP).
On Monday, the listing portal published a blog post written by CEO Damian Eales in which Eales and Realtor.com expressed their support for the policy.
With housing inventory on the rise nationwide, Eales wrote that it’s “imperative that sellers and listing agents thoroughly comprehend the real risks that come from keeping a listing exclusive or private.” He noted that this is why Realtor.com is getting involved in the debate now.
“Realtor.com fully supports the principles and policy of Clear Cooperation because it is at the heart of the most consumer friendly marketplace on the planet,” Eales wrote.
“The genesis of this open marketplace was some 30 years ago when the National Association of Realtors (NAR) and MLSs facilitated the digitization of listings nationwide, the adoption of common standards for information sharing, and the broadcast of those listings across the nascent internet — originally only on Realtor.com.”
‘Wrong side of history’
Eales, who is originally from Australia, described his experience selling properties at auction, which is how most homes are bought and sold in the country. On the first property he tried to sell, in an attempt to save money, he cut corners on advertising, which resulted in his home being “passed in” at the auction.
In the U.S., sellers do not pay to advertise their home as entering into the MLS broadcasts it to all potential buyers. Eales said this is something “unusual” about the U.S. market, but he believes it’s integral for buyers to gain access to all properties, “not because of who they are or who they know, but because they have access to the internet.”
Eales went on to address the topic of seller choice. He acknowledged that while there are some fringe cases where sellers with no privacy or security concerns want to keep their homes off of the MLS, “it is anathema to common sense that more and more sellers want the ‘choice’ of fewer free eyeballs.”
According to Eales, this “incontrovertibly leads to less competition in the form of fewer buyers, fewer offers and potentially a lower sale price.”
The post insinuates that agents who “seduce” their sellers into using this strategy are not upholding their fiduciary duty to their clients.
“In representing the sellers’ fiduciary interests, and in compliance with laws like the Fair Housing Act, real estate professionals ought to not just act ethically, they should be seen to act ethically,” Eales wrote.
“Brokers who facilitate private marketplaces are likely to find themselves on the wrong side of history by putting themselves in the bullseye of litigation from both sellers who feel shortchanged, as well as buyers who claim they were selectively excluded from seeing a property.
“Our industry needs neither the reality nor the perception of the type of steering that Newsday exposed in 2019, the same year the Clear Cooperation Policy was adopted.”
‘Lever of last resort’
As more properties are listed in some markets, Eales wrote that if sellers aim to start a bidding war, “selling a secret” is not the way to go.
Despite Realtor.com’s support of CCP, the company — which does not rely on internet data exchange (IDX) feeds to obtain access to listings — is obligated to show all listings under the terms of its agreement with an MLS. This means that unlike Zillow and Redfin, which use IDX feeds, it cannot ban listings that do not comply with CCP.
“This is not to say that we won’t be open to working with MLSs who want us to better enforce the principles and policy of Clear Cooperation,” Eales wrote. “Why should an uncooperative listing agent be able to sell privately to a restricted group of buyer agents and buyers; and at the same time, benefit from unrestricted access to the listings of cooperative listing agents?
“Why should sellers be able to access the value of the very MLS they diminished by being uncooperative? One shouldn’t turn up to a potluck dinner carrying only a fork.”
Eales believes the reason “uncooperative listing agents” are upset about Redfin’s and Zillow’s bans is because they anticipate that their private marketing strategies won’t work for many sellers. This will cause them to seek exposure on listing portals as a “lever of last resort.”
“When it dawns on sellers that maybe ‘more really is more’ and the advice they received from their listing agent was not fully in their interests, these sellers will be justifiably furious to learn their listing is absent on two of the biggest free real estate broadcast channels in the country — representing 120 million Americans [based on Comscore data], just one of whom might have been a new bidder.”
Data from industry analyst Mike DelPrete shows that roughly 7,000 private exclusive listings from Compass, which supports private listings and the end of CCP, will be banned from Zillow starting June 30 when its policy goes into full effect.
