Everyone talks badly about Robert Reffkin/Compass and our stand against the CCP.

It’s because the industry is so sensitive about the thought of agents hoarding their listings off-market to sell them to their own buyers or to buyers represented by other in-house agents. To what extent it is actually happening doesn’t matter – just the thought bugs people.

Off-market sales have happened at all brokerages since the beginning of time. But for those who believe that every home should be exposed to all buyers, it makes them think that shenanigans are in play.

On February 21st, I did this blog post where I described reasons for sellers and agents to sell off-market:

• 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.

When forming opinions about off-market sales, let’s factor in the market conditions.

We are screaming towards a buyer’s market, and it’s already upon us in some areas. The last time we had a buyer’s market was fifteen years ago – which nobody remembers – and it’s been the exact opposite over the last five years.

You will know it’s a buyer’s market when you hear more people saying that it’s not a good time to sell.

It will lead to conversations like this: “Hey Jim, I’ve heard horror stories from friends and family who are trying to sell their home and nobody is coming by – they have no showings!”

“I don’t want that to happen to me, so sell my house by any means necessary. I still want all my money, and if you think selling my house off-market will accomplish that, then do it!”

When potential sellers see unsold listings stacking up, they are going to consider alternatives, but:

1. Selling to an instant-cash flipper might seem more enticing, except they want a 30% discount.
2. Renting the house out is a terrible idea if you think prices might go down later.
3. Going on the open market at less than the dream price doesn’t sound good either.

In a buyer’s market, the selling choices seem bleak. It causes potential sellers to jump at a sexy option like selling off-market – if that will get them their money. They aren’t going to take a discount off-market. Instead, they will imagine that it’s the best chance to sell for their price, which is all that matters to them.

Yesterday’s bombshell announcement that Ketchmark will be suing the brokerages that support the Clear Cooperation Policy should be the end of the CCP. Who wants more lawsuits?

Reffkin’s hardball stance against the CCP is very understandable when you consider how we got here.

The quasi-governing body known as the National Association of Realtors casually walks into a Missouri court room and gets their lunch handed to them. Then they settled on behalf of the brokerages? Who gave you the power to levy a $52 million fine against Compass without a chance to defend ourselves? Plus, you’ve done nothing to prevent future lawsuits from happening!

Unfortunately, the anger over how the NAR mis-handled the lawsuit/settlement has turned into a battle about the CCP, when they are two different things. If NAR would step up their game and end the threat of lawsuits while providing expert guidance on the CCP issue, then we might listen. But there is no faith that they will do anything, so we need to defend ourselves while providing our own solutions for our clients.

Reffkin is promoting Private Exclusives as part of a 3-Phase marketing plan in order to offer a comprehensive marketing solution. There is no push by Compass management to sell homes off-market. Behind the scenes, all we have is a simple one-liner list of homes throughout the county, and most of them have no photos, no descriptions, and can’t be shown because they are being prepared to go to market. That’s not a vibrant off-market sales environment – it’s just a parking lot. I struggle to even look at it because there’s nothing there. At least not yet.

Yesterday there were 287 Compass private exclusives in San Diego County, and there are 4,653 houses, condos, and mobilehomes actively for sale on the MLS today. How many PEs are going to sell off-market each month? Maybe five or ten? It’s the same at other brokerages and it’s been the norm for 100+ years.

But it has promise because the sellers are going to want an alternative in a buyer’s market.

Though the off-market listings might look sexy to buyers, they better get good help on pinpointing the value under the current market conditions. It is why buyers should embrace bidding wars – because when there isn’t one, it tells you something too.