The debate surrounding the National Association of REALTORS’® Clear Cooperation Policy raged on in April, with Compass suing Seattle-based Northwest MLS at the end of the month.
Tension surrounding the anti-private listing protocol hit a fever pitch when NAR amended its policy at the end of March, adding a new listing option that allows sellers to delay widespread marketing of their properties.
Critics of the change included NWMLS, which houses listing data for a majority of the counties in Washington. The group had previously stood in support of NAR’s policy.
“Restricting the visibility of available homes to a select, exclusive group of buyers and brokers is fundamentally unfair and perpetuates inequalities that have long plagued the housing system,” said President and CEO Justin Haag, adding that such exclusionary practices will lead to the dismantling of the real estate marketplace. “The discriminatory effect and disparate impact that results from restricting access to listings to an exclusive group of buyers and brokers is just that — discrimination.”
Windermere Real Estate — the Seattle area’s biggest brokerage — has also been outspoken about its opposition to private listing networks, as well as brokerages that seek to form them.
There’s no misunderstanding which brokerage Windermere and NWMLS are referring to, though: Compass.
Compass has long been the loudest dissenter to NAR’s Clear Cooperation Policy (CCP), with CEO Robert Reffkin telling Chicago Agent back in January, “the easiest way to create more inventory in this country is to take away the risk of listing your house — days on the market and price drop history.”
Reffkin added that those two stats can make a home “look like damaged goods in the eyes of a buyer.”
Technically, NAR’s updated CCP does allow for off-MLS listings. However, since NWMLS is privately owned, it’s not subject to NAR’s rules. Therefore, under NWMLS policy, homeowners in most of Washington are prohibited from using any pre-marketing tactics if they want to add their homes to the MLS.
Compass says that policy is unfair to its clients in the area, who are forced to use NWMLS since the service has “no meaningful competitors” in the market.
Windermere Real Estate has argued the same about Compass though, saying that if Compass, which ranks among the largest brokerages nationwide, is allowed to form its own private listing network, it will prohibit open and fair access to the market.
It’s important to note, though, that Windermere holds six of NWMLS’s 16 board seats. No other brokerage has more than one, as Compass pointed out in a statement to Seattle Agent — meaning the company has an oversized influence on NWMLS policies and practices. It also means the brokerage is inextricably tied to the new Compass lawsuit, announced at the end of April.
Other major players in the industry have made statements that echo NWMLS’ stance, though.
Zillow banned private listings in April, with Redfin right in tow. Brokerages including NextHome, West USA Realty and eXp Realty also followed Zillow’s lead, committing to sharing all listings with the MLS, and all online listing portals, within 24 hours of public marketing.
eXp also doubled down with a new seller advisory form that warns sellers of the potential risks of marketing and selling their home privately.
Rumblings of Compass’ plans stirred online when a new website called “Washington Homeowner Rights” launched, seeking potential plaintiffs for a class-action lawsuit. While Compass wasn’t explicitly listed as the creator, the site’s Terms of Service and Privacy notices linked back to Compass policies.
The site claimed that Compass clients were damaged by NWMLS rules, saying, “In every other state, homeowners have the freedom to explore alternative off-MLS marketing strategies that protect value, privacy and flexibility. In Washington, that freedom doesn’t exist — and sellers are paying the price.”
However, NWMLS flexed its market power on April 16 when it cut off its data sharing exchange with Compass for nearly two days, leaving Compass agents and clients without Seattle-area MLS access. Access was restored after an agreement was allegedly reached between the two parties.
Compass took a public shot at NWMLS with its homeowner defense lawsuit though, announced in a press release on April 25.
“Compass is proud to support Washington homeowners who are asking the right question: Why are we the only homeowners in America without a choice in how we sell our home?” Reffkin said. “The NWMLS system wasn’t built to serve homeowners — it was built to preserve the monopolistic power of the NWMLS.”