A buyer’s market is once again on the horizon in the U.S., with inventory in many markets achieving or surpassing pre-pandemic levels. In this context, it is imperative that sellers and listing agents thoroughly comprehend the real risks that come from keeping a listing exclusive or private. That’s why we’re adding our voice to this conversation 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. The genesis of this open marketplace was some 30 years ago when 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.
As a result, the U.S. real estate market is unusual in that U.S. sellers do not pay for their home to be seen by buyers, and as a result buyers get fair access to all properties – not because of who they are or who they know, but because they have access to the internet. In addition, because of this open marketplace, both buyer and seller are more likely to have independent fiduciary representation – the gold standard for what is likely the biggest, most leveraged purchase in one’s life.
Having sold homes in Australia – primarily through live auctions – I wouldn’t hesitate to spend significant money on leading real estate platforms. The value of reaching the widest possible pool of buyers is undeniable. I learned this the hard way with my first property, which was “passed in” at auction – meaning there weren’t enough bidders and the home didn’t sell. In trying to save money, I cut corners on advertising and failed to attract all potential buyers. It was a costly reminder that being penny wise can often be pound-foolish.
If the topic d’jour is Clear Cooperation then the Beef d’jour is “seller choice”. Although there are some genuine fringe cases – it is anathema to common sense that more and more sellers want the “choice” of fewer free eyeballs – which incontrovertibly leads to less competition in the form of fewer buyers, fewer offers and potentially a lower sale price. More likely, under the influence of those who should know better, and those who have a fiduciary obligation to serve their client’s interests, some sellers are seduced into believing that “less is more.” It is utter nonsense, and never-more-so in an emerging buyers’ market.
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. 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.
Selling a secret is no way to start a bidding war and will surely result in shortchanged sellers, and at the same time may be used by the less scrupulous for steering. As the No. 1 portal in the U.S. for residential real estate media coverage¹ and the fastest growing real estate news service by publishing volume², we have the platform to tell these stories as they come to light, warning new sellers of all of the side effects.
At Realtor.com, we would rather not imitate a real estate broker in order to access listings through IDX feeds, because we believe the unique relationship we have with each MLS allows us to purposefully improve the experience of buyers, sellers and the professionals that serve them. Unlike Zillow and Redfin – whose new policy requires listings to be entered into the MLS within one day of public marketing – our obligations under our MLS agreements require us to show all listings. 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.
Essentially, the MLS acts as a cooperative – and cooperation, after all, is what enables the MLS to create this free and open marketplace for the benefit of all buyers and sellers. 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.
Some argue that “seller choice” means sellers should be allowed the choice to be uncooperative with the cooperative — the logic is plainly flawed. Sellers do have a choice in this scenario — to cooperate with those who are adding value to the marketplace, or not participate in the cooperative.
There is a final irony here. Uncooperative listing agents have already anticipated that their “less is more” approach will not work for many sellers, which is why these listing agents are animated by Zillow and Redfin’s unwillingness to share the benefits of cooperation when they need them as their 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 Americans³, just one of whom might have been a new bidder.
To these uncooperative listing agents and sellers I say, if you want to catch a big fish, avoid small ponds.
– Damian Eales, CEO of Realtor.com
Post Script.
For all the time our industry has spent distracted in our echo chamber debating private listings – a concept which erodes the value we provide consumers – I lament we haven’t invested the same time and energy advocating outside our industry for solutions to the real crisis facing American home buyers – that being the lack of affordable, available housing. America is short 4 million homes, and housing affordability is at its worst in 40 years.
At Realtor.com, we will be part of the solution by using our platform to advocate for more construction, improved zoning, and a more inclusive market. We’re shining a light on which states are solving the problem and which are making the problem worse, through our Let America Build campaign.
Housing supply and affordability is a bipartisan issue that almost everyone in our industry agrees on – brokers, portals, MLSs, NAR, industry media outlets – even Republicans and Democrats agree we have a problem. If as an industry, we took the same time and effort we dedicate to debating Clear Cooperation and instead directed it at influencing lawmakers to solve the genuine problem of housing supply – the communities we serve would be immeasurably better off – and so would we.
It is time we shift the conversation – and fix what’s actually broken.
