The Compass CEO, Robert Reffkin, is a vocal opponent of the Clear Cooperation Policy. Those in the business call him names and say his only motivation for opposing the CCP is to promote in-house sales.
The point that gets trampled over is that consumers and agents should be free to choose how they want to market the properties for sale.
The CCP insists that listings go onto the MLS right away, and be subject to this nonsense:
They don’t name Zillow but obviously that’s the target.
As we saw yesterday, Zillow is not truthful. They don’t care about doing what’s best for sellers or agents. They only care about making money, and dominating the space.
Unfortunately, the NAR and others turned over the control of the marketing of our listings to Zillow, Homes.com, and Murdoch’s Realtor.com – which is the real disappointment! Realtors don’t own, and we don’t control realtor.com? What a travesty!
Compass is determined to take control of the marketing of our listings.
It starts with getting our listings onto the internet before the search portals. Having the consumers see our listings on our website, and thereby contacting the listing agents who know the most about the properties, is better for the consumer than being funneled to outside agents who are paying for leads:
I’ve been saying for a while that everything happening in residential real estate is heading towards single agency, and eliminating the buyer-agents. Homes.com is directing consumers to the listing agent, and spending millions on advertising to make a point of it.
We’re in the transition phase, and I’ll predict the future.
Compass will quit NAR and the MLS, and go it alone.
If you ask me, we’re already big enough to do it now. I have encouraged Robert to do it, but it’s too early.
But it’s coming.
We will still be happy to cooperate with outside agents – they will just have to find our listings on our website, instead of elsewhere. We’re just doing what Redfin did – make our website more popular with consumers.
What about the Private Exclusives, the title of this post?
They are allowed now, and because you only sell a house once, sellers and agents should have the choice to sell a home off-market. Here are good reasons to do so:
- The allure of an insider deal can cause a buyer to pay more – they are sexy deals.
- Buyers don’t have the benefit of open-market exposure to test the price.
- It keeps the bozo agents from screwing up deals.
We have it happening right now. Our sellers are in escrow with buyers who got squeamish this week. Their agent was NO help. He had no experience or ability to try to help them through their foibles which had little, or nothing, to do with buying the house. Donna and I both had to step in to save the day (another reason to hire us to sell your house!).
It is detrimental for escrows to blow out. Trying to ignite the same urgency as when a listing is fresh on the market is impossible. Every buyer thinks something is wrong, and rarely do a home sell for the same price or more the second time around.
Those are three good reasons for our sellers to go Private Exclusive. I still believe in open-market exposure being the best route but it’s because I’m old-school. The current market conditions are tough and inviting every joker to bid on my listings has consequences, and they’re not all good.
Reffkin and Compass will undoubtedly taking more heat for questioning the CCP in the coming months, but it’s a sideshow. There will be bigger changes down the road – promise.
Selling off-market will get more attractive as conditions get more sluggish – there are already numbskulls out there telling people (my potential sellers) it’s not a good time to sell when in reality you should get out while you can. Of course, experts like this guy think that +25% more listings is good for business:
The latest data shows that sellers are getting off the sidelines, as the lock-in effect starts to ease. Active listings rose 25 percent compared to January 2024.
“For a sense of scale, it was about 829,000 active listings this year, compared to only about 666,000 active listings last year. And in fact, we are now only 13 percent below January 2020 levels, on the eve of the pandemic. That’s a huge milestone the housing market is approaching, after really being defined by low inventory for the last few years,” Windermere economist Jeff Tucker writes.
“The allure of an insider deal can cause a buyer to pay more – they are sexy deals.”
Do you have any evidence to support this claim?
“Buyers don’t have the benefit of open-market exposure to test the price.”
IMHO, RE industry has descended right into the gutter alongside slimy used car salesmen. License to screw over consumers using information hiding and deceptive practices.
“There will be bigger changes down the road – promise.”
Elimination of pre-sale inspections and mandatory disclosures. Elimination of escrow via mandatory seller-arranged financing (complete with kickbacks). Refusal to allow buyer representation at all. “Sign on the line today, accepting all our slimy terms, or lose the property to the next sucker tomorrow!”
“The allure of an insider deal can cause a buyer to pay more – they are sexy deals.”
Do you have any evidence to support this claim?
You say that like you don’t believe me.
Want to just use today’s example?
https://www.compass.com/listing/6216-camino-de-la-costa-la-jolla-ca-92037/1780162431824738025/
This is an old junker from 1959 that was described like this:
One of a kind, spectacular opportunity to remodel or build your dream home on this 1/2 acre plus, ocean front location with panoramic ocean views.
Yet it sold for $4,400,000 more than the last sale on this side of the street.
We can predict that the seller and agents are calling it a sexy deal, and hopefully the buyer too. You can form your own opinion.
If you are a buyer and see some of the wacky open-market sales, the idea of buying an off-market deal will sound inticing. If you were a buyer wanting an ocean view in La Jolla, imagine how you feel about this going for +40% over the list price:
https://www.compass.com/listing/2223-calle-guaymas-la-jolla-ca-92037/1759448383857096161/
Number of the day: 5 percent. That’s how much eXp’s agent count was down year over year at the end of 2024.
They are one of the new-age brokerages that you would think could survive the agent meltdown.
But nobody is immune.
The agent exodus is just beginning, and it is completely based on age. The older crowd can’t keep up, and they really don’t want to. Pack it up and move to Alabama instead and live happily ever after.
The 80/20 rule is in place and it will get worse – probably 10% of the agents will be doing 90% of the sales. It’s why a single brokerage or two could carry the ball. The independent brokers might survive in Kansas, but in major metro areas you are cooked. Compass is coming to swamp the boat, and take control of the future of residential sales.