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Detractors of the the National Association of Realtors’ Clear Cooperation Policy are intensifying their efforts to have the 1.5 million-member trade group eliminate the rule.
The American Real Estate Association, a rival trade group launched in the wake of harassment accusations at NAR, launched a petition Friday calling on NAR to end the controversial policy.
The petition had garnered more than 2,000 signatures as of Monday afternoon at 6: 30 p.m. Eastern.
Jason Haber
“We are just getting started,” Jason Haber, a Compass agent and one of the association’s founders, told Inman.
“We rolled out the petition over the weekend as we wanted to put forth these ideas into the public square. Today, being the first work day it was live, the response has been remarkable. Once we hit 2,500, we keep going. The goal of the petition and our effort is not to be antagonistic, but to help NAR understand that agents across the country are ready to move on from Clear Cooperation.”
The Clear Cooperation Policy, which went into effect in 2020, requires listing brokers to submit a listing to their multiple listing service within one business day of marketing a property to the public.
“Enacted under the guise of increasing transparency, the Clear Cooperation Policy has placed severe restrictions on both homeowners’ consumer choice and the ethical obligations of real estate professionals,” the American Real Estate Association’s petition reads.
“Under this policy, real estate professionals are forced to submit listings to the Multiple Listing Service (MLS) within one business day of public marketing, regardless of their clients’ wishes. This one-size-fits-all mandate violates the fiduciary duty agents have to their clients, forcing them to disclose information that may not be in the homeowner’s best interest.”
Compass CEO Robert Reffkin is a vocal critic of the policy. Private exclusive listings, which are marketed off the MLS only to Compass agents and their buyers, are part of the brokerage’s business model.
The CCP includes a carve-out for office exclusives, which allows brokers and licensees of a brokerage to promote a listing within the brokerage and to that brokerage’s clients one on one without having to submit the listing to the MLS.
Some real estate brokers have threatened mutiny over the exemption, which they argue inadvertently benefits large, national brokerages at the expense of smaller, independent brokerages because the former’s larger networks mean they are better able to collect commissions from both sides of a transaction, known as double-ending, with office exclusives. Critics have called the carve-out a “loophole” that perpetuates pocket listings.
Mauricio Umansky of The Agency is also a co-founder of the American Real Estate Association. Last week, Umansky threatened to re-file a lawsuit against NAR alleging antitrust violations over the CCP due to the rule’s alleged impact on his now-defunct private listing network, ThePLS.com.
Asked for comment on the petition, NAR sent Inman the same statement it sent last week in response to Umansky’s threat: “NAR is actively listening to the perspectives and feedback of industry participants regarding the Clear Cooperation Policy. NAR is open to this important ongoing dialogue with the ultimate goal of helping NAR members and consumers succeed.”
NAR’s MLS Technology and Emerging Issues Advisory Board, which is a subset of NAR’s Multiple Listing Issues and Policies Committee, met on Sept. 12 and 13 to discuss the CCP, but came to no final decision. The advisory board will meet again next month to further consider the rule. A date for that meeting has not yet been scheduled, NAR told Inman Monday.
In addition, the U.S. Department of Justice’s Antitrust Division is investigating the CCP. The DOJ and NAR have been fighting over the probe in court and the fight may next be headed to the U.S. Supreme Court.
The American Real Estate Association’s petition does not address criticisms of pocket listings, including NAR’s primary stated reason for implementing the CCP: fair housing. Pocket listings, objectors say, limit the buyer pool for a listing to an agent’s network, which is likely to be made up of people like the agent, and don’t provide buyers with equal access to listings.
“Clear Cooperation is not optimized for addressing fair housing issues – instead it maintains MLS dominance as a listing service at the expense of homeowner’s choice,” Haber told Inman.
“There are many ways NAR could have addressed potential fair housing concerns related to ‘off-mls’ listings. For example, they could have required that agents list their client’s property on one of the many known national consumer facing websites if they do not list on the local MLS. These sites are directly available to the consumer, as opposed to the MLS, which is only available to its members.”
The petition also does not address the argument of NAR and many MLSs that listing on the MLS provides maximum exposure to buyers — which sellers presumably want if they are consenting to public marketing — and therefore nets sellers more money.
“Homeowners deserve choice and they deserve to be put first,” Haber said. “They should not be underestimated or treated in a paternalistic manner. They understand that ‘maximum exposure’ does not always equal the highest price in certain instances depending on the product type, geography, market conditions, etc.
“Additionally, some clients value discretion and privacy (e.g. those going through divorce) as much as they value price and want the opportunity to have their personal data off of the MLS.”
There is also a common criticism that those who want to end the CCP want to do more pocket listings in order to represent both buyer and seller in a deal and therefore receive double the commission. But Haber argued that the opposite could happen if the CCP were eliminated.
“I believe the inverse is true — that the percentage of double-ended deals may decline,” he said. “Innovation will fill the marketplace, there will be all kinds of interesting disruptions that will be good for the industry. Agents have been getting fined by NAR for obliging client requests. It’s time we end that and put the client first.”