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:
Selling to an instant-cash flipper might seem more enticing, except they want a 30% discount.
Renting the house out is a terrible idea if you think prices might go down later.
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.
The last debacle by Ketchmark cost Compass $52 million – there is no way that we will keep putting ourselves at risk of more lawsuits. It’s why Robert Reffkin has been so adamant about disolving the Clear Cooperation Policy, even though he doesn’t state it often enough.
Once the CCP is gone, there won’t really be any reason for the National Association of Realtors to stick around much longer. Their blunder of taking the lawsuit too casually and losing it AND forcing a settlement on the big brokerages should cost them their jobs.
I’ll be at a two-day conference next month where the CEO of NAR will be speaking. I know she is going to gloss over this and say everything will be fine – I’m hoping for a chance to ask a couple of questions!
Soon we will be back to pocket listings and in-house sales being the norm, and putting homes on the MLS will be a last resort for many agents.
Every year it gets worse for homebuyers, and this will be the 2025 gut-punch for them.
It’s a hot topic among real estate agents, but how widespread are the off-market sales?
We saw that in the last blog post that 155 NSDCC homes that have gone pending this year have already closed escrow. But let’s back it up to get a bigger sample and look at all of the 257 NSDCC sales in 2025 – including those that went pending last year.
Of the 257 sales, only 21 of them were sold off market, or 8% of the total number of sales.
Of the 21, only EIGHT were Compass listings. We’re not the only one!
Here is the crazy stat: Of the 21 off-market sales, TEN were sold to an outside brokerage!
It’s going to be rare when an agent takes a listing and just happens to have a buyer for it. Some of these double-enders are going to be the reverse – when an agent has a buyer and solicits sellers in the buyers’ desired area and gets lucky to find a deal. Most agents will input that sale as representing both parties even if they didn’t have a formal listing agreement with the seller – which is supposed to be required for MLS input (nobody checks them).
When representing a seller, I’m still not a fan of doing an off-market sale.
The only one we did was a year ago when the sellers agreed with me that this price may never happen again because it was based on another off-market pending sale of the same model (we closed first):
I wouldn’t want to be trying to sell for $2,175,000 in there today!
While there may be an occasional good reason to sell off-market, it’s not a big segment of the total sales. Reffkin said yesterday that 94% of Compass listings sell from open-market exposure via the MLS, and that will probably continue.
But it’s a sexy topic!
The NAR/MLS rules are the problem. In the near future, Compass and other brokerages will likely break away from NAR/MLS restrictions and use our website to expose our listings to the market – and/or we make a deal to share our listings with a national entity like homes.com.
Robert Reffkin has heard enough and wants to address the rumors:
Many of you have heard things like “Compass is trying to sell listings off-market,” and “Compass is trying to double end deals.” These misconceptions are intentionally designed to create fear in the industry.
Fiction: Compass is hurting sellers by keeping listings from the MLS. Fact: In 2024, 81% of Compass Coming Soons that sold off the MLS, sold at or above the final list price.
Fiction: Compass just wants to double-end more deals. Fact: 94% of Compass listings that sold in 2024, sold on the MLS.
To set the record straight, we want agents at every brokerage to know We Co-Broke With Everyone. By setting up a saved search for Compass Coming Soons, any agent at any brokerage can instantly receive alerts when new Compass Coming Soon listings become available.
Go to compass.com and search for listings in Coming Soon, then save your search!
I love that Robert Reffkin is becoming the industry spokesman – what he says is mostly accurate and informative. For the record, yesterday we had Natalie film my next video before I saw the boss talking about 2025 inventory:
I was in Orange County yesterday and saw this in a local publication:
The off-market craze is just getting started.
We’ve already been hearing the hucksters at open houses who lead with their only pitch:
“I operate in the off-market space.”
“Does your agent offer you off-market deals?”
“Would you like me to alert you to our off-market listings?”
“Ok, great – sign my buyer-broker agreement right here.”
When the inventory of superior homes being so tight, it is inevitable that buyers will be lured into thinking that there might be something they’re missing.
But the real benefit to the off-market action is that realtors regain control of the market.
The industry loved it during the frenzy when the MLS/search portals were publishing sales that closed several hundred thousand dollars over the list price in the first few days on the market.
But now, the MLS/search portals are the enemy.
They publish the number of days-on-market, and the price reductions….ouch. If you are a listing agent of one of those listings, you are begging for ways to hide those facts. The agents who ‘refresh’ their listings have been thwarted now because the MLS also publishes the CDOM, or combined-days-on-market to highlight when a listing was just cancelled and re-inputted:
This is one of the main reasons why the Clear Cooperation Policy will be attacked by the brokerages.
Operating in the off-market space avoids racking up days on the market, and public changes in price. Think about the commercial brokers – you have no idea how long they have been sitting on that listing, or what the price was an hour ago, let alone tomorrow.
When the market is great, then the truth is our friend.
Nowadays? Not so much.
Potential home buyers must think that the real estate gods have it out for them. Rates and prices went through the roof and never came back (yet), the bidding process is a disaster, and now they are forced to pay for their own agent (maybe). In spite of the internet, the real truth about the market has never been so well disguised. They can’t get a break!
Sellers just want their money.
Compass needs a partner. If we split from the pack over the CCP then we will be labeled the sole renegade. But if eXp, Realogy, KW, or Berkshire joins us then the rest will fall in line (the eXp CEO said so). We can quit the MLS, and make Zillow/Homes.com publish our listings the way we want them published.
In the meantime, we can expect the off-market craze to thrive.
The off-market sales are an attractive option for big shots like John above who prefer to protect their privacy, blah, blah. What about the regular folk? Is there a bulk of sales happening off-market?
How many off-market sales are there in the general marketplace?
Lance has been doing a great job documenting the natonal real estate market. He found a company that did a study and they said that there have been 1,200,000 off-market sales in the county this year, including 60,000+ in California:
Of course, realtors can’t brag enough about their off-market conquests, and getting tipped to their pocket listings will be one of the primary pitches you will be hearing from aggressive agents at open houses. Braggadocio like this:
I checked the most recent 196 single-family sales in Encinitas, Rancho Santa Fe, and Carmel Valley in all price ranges. I reviewed the tax records and the MLS and found 19 homes that were sold off-market.
The 19 off-market sales break down like this:
10 were entered onto the MLS with zero days on market.
4 agents sold their own home off-market (?).
4 were flippers (2 buys and 2 sells)
One agent bought an expired listing off-market.
People are going to sell their home off-market for whatever reason. But realtors have a fiduciary duty to their sellers, so there must have been special circumstances with the ten sales (like I had earlier this year when I did one).
If there were 25% or more of the total sales being sold off-market, it would be a big deal – and it might come to that some day. But with only ten (5%) of the recent sales being sold off-market by realtors, it’s a nothing-burger for now.
I spoke to a few agents on the broker preview yesterday about business this year, and the common theme was that agents are have big trouble finding people who want to sell their home. It suggests that the inventory of quality homes will be extremely low this year.
What happens, when that happens?
It means that when listing agents get a hot new property to sell, they will be tempted to find their own buyer first, and/or spoon it to a select few of their agent friends, and then maybe expose it to their office mates before putting it on the MLS/open market.
The extinction of buyer-agents is well underway.
As the market tightens further, more listing agents will be tempted to sandbag their listing and not put it on the open market. Look what happened to the agent this week who received 20+ offers (they told me the final count was 30 offers). After the listing was put on the open market, the flood of offers caused regrets about the workload, so they just grabbed one and shut it down.
Last night I popped off in the comment section about how the business gets shadier every year.
Here’s proof – not every listing with zero days on market was sandbagged, but let’s face it. If you mark your listing pending within a few hours of it going live on the MLS, you didn’t get full exposure.
NSDCC Annual Closed Sales With Zero Days On Market
Year
Annual Detached-Home Sales, Total
# With Zero Days on Market
Percentage
2016
3,107
84
2.6%
2017
3,084
99
3.2%
2018
2,799
84
3.0%
2019
2,834
100
3.5%
2020
3,190
116
3.6%
2021
3,184
173
5.4%
2022
1,939
124
6.4%
When agents see other agents touting their off-market business, they think it must be ok, so they do it too. It feeds on itself, especially when the allure of double-ending the commission is so strong in a tight-inventory environment.
This disease among agents is everywhere. You will notice it at every open house you attend – the agents conducting the open house can’t wait to tell you about their off-market opportunities to get you to sign up. You’ll see it mentioned on social media daily – agents don’t think there is anything wrong with promoting off-market deals. Heck, everyone is doing it!
I regularly ask the agents who have a quality home for sale how they will handle multiple offers, and the answer is always the same: “I don’t know”, before they stumble and mumble something about the seller will decide (oh, thanks for that!) so the agents don’t get blamed for the end result. It’s embarrassing that they don’t have any strategy, and want to leave the door open for shenanigans later. No wonder they want to do an off-market deal, with no scrutiny.
Because no one is doing anything to intervene, the off-market deals will continue to be an accepted practice, and exacerbate the trend towards single agency (and the extinction of buyer-agents). Within the next year or two, every buyer will just go to the listing agent and take their beating.
This was the Private Exclusive off-market listing that hit our intra-office website late in the afternoon and literally the next day most of the top Compass agents and me rushed over there to check it out.
Both buyer and seller take a gamble on price when transacting off-market. Since this was filmed, two sales on Rancho Encinitas Drive have closed for over $4,000,000, so this buyer should be happy with their $3,230,000 purchase price here (which was $405,000 over the list price).
One sign isn’t going to change the world, but it’s an example of how home sales will be changing in the future. If/when homes are sold in-house (not exposed to outside brokers and buyers) like commercial properties, Compass should extend its dominance in San Diego County – especially north coastal.
I can’t control how this turns out; I can only roll with it!
Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.
jesus a sahagun
2024-11-10
Verified
This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.
SabihaPasha
2024-07-22
Verified
Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless.
So grateful that I had them on my side!
dodyfrancis
2024-07-10
Verified
I appreciate Jim & Donna's great teamwork, sound advice, and guidance that eased the stress of selling our Carlsbad home. Their professional input and assistance throughout the process was very helpful. Highly recommended!
sbisachsen
2024-07-10
Verified
The Good
The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market.
The Great
Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them.
The Outstanding
We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time.
The Truly Exceptional
Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs.
The Recommendation
For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...
user19164788
2024-06-21
Verified
We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready.
Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free.
Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.
cali4neal
2024-05-07
Verified
We had a wonderful experience buying our home with Donna and Jim! In particular I was very impressed with their efficiency and support through the purchase process. As we were doing the walk through, Donna started contacting roofers, plumbers, aircon, electricians, etc for all the areas we needed potential repairs - by the time we were done with the walk through appointments were already set up to get estimates for all the major services. When we had to change an appointment, or couldn't make one, Donna was there to arrange things to fit our schedule. Even after we closed on our home, Donna helped set up the repairs we needed before move in day. They truly went above and beyond to deliver exceptional service. I'll be calling them for our next home!
zuser20160809095816651
2024-03-16
Verified
The sale of our home exceeded our expectations - Jim and Donna Klinge are the best!
We’ve followed Jim’s Bubbleinfo blog since the 2006 housing bubble. After he helped us buy in 2017 we stayed in touch and Team Klinge were the obvious choice when it came time to move. They guided us through the preparation of the house, including a kitchen refresh - Donna and Lisa skillfully managed the various contractors for us after we had moved out of state. Donna’s excellent attention to detail and regular communication made the whole process run smoothly from a distance.
Jim’s market knowledge, expert negotiating skills and candid opinions, together with Donna’s responsive communications and problem solving, set them in a league of their own.
Highly recommended!
bourmakin
2024-02-09
Verified
Jim and Donna have exceeded my expectations with sale of my house. It was best experience with house sale. Professional, responsive, superior negotiating skills. I would recommend them with 5 star (I would give them even more than max) rating. Sale of my house was closed for really good price in 10 days. Jim and Donna perfectly handled house preparation for sale. Thanks a lot!!!
user1916779
2023-11-17
Verified
Jim and Donna have exceeded my expectations and made my most recent move back to California go so much more smoothly than I expected. Jim’s Bubbleinfo blog was full of useful information about the current market conditions. His experience helped us make a successful offer for the home we wanted in a desirable neighborhood. After the purchase Donna organized the work we needed done in the house without us having to make an additional trip. We were pretty worried when we started searching for real estate that not being in the area was going to makes things really difficult but Jim and Donna made the process so much easier. I enthusiastically recommend them.
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