On Friday, Compass filed a federal lawsuit against the Northwest Multiple Listing Service (NWMLS), accusing the Seattle-based MLS of monopolistic and anticompetitive behavior.
The lawsuit, which was first reported by The New York Times, claims that NWMLS and the traditional brokerages that control it are using their power to block competition and limit how homeowners can market their properties.
What Compass Is Claiming
In the 39-page complaint filed on April 25, Compass makes several accusations, including:
- NWMLS is a monopoly. The lawsuit says NWMLS controls nearly 100% of brokered home sales in the Seattle area, leaving sellers with no real alternative.
- NWMLS is run by competing brokers. Compass points out that NWMLS is owned and governed by brokerages. The complaint states that of 15 directors of the board, six are affiliated with Windermere, the largest real estate brokerage in Washington.
- The rules block innovation. By banning pre-marketing strategies like Compass’s Private Exclusives, NWMLS is allegedly shutting down consumer choice and protecting the traditional brokerages from competition.
- Compass got punished for challenging the system. After Compass pushed back against these rules and tried to work within the system, NWMLS not only rejected the rule change but also cut off Compass’s IDX feed on April 16. It was restored the following day.
Compass Accuses NWMLS of Shutting Down Seller Choice
At the center of this fight is Compass’s Private Exclusives program, the first step in their three-phase marketing strategy.
According to Compass, many of their sellers outside Washington use this strategy because it helps them:
- Test price and staging without racking up “days on market”
- Get feedback from serious buyers early
- Avoid public price cuts, which can tank perceived value
In a press release, Compass Regional Vice President Cris Nelson stated:
“We’ve seen strong demand from Seattle homeowners for pre-marketing options. When given the choice, 36% of homeowners working with a Compass agent in Seattle chose to pre-market their home as a Compass Private Exclusive, which was done by NWMLS rules at the time.”
Compass CEO Robert Reffkin doubled down on consumer choice with the following statement:
“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 homes? The NWMLS system wasn’t built to serve homeowners – it was built to preserve the monopolistic power of the NWMLS. We’re proud to stand with homeowners who want the freedom to choose how their homes are sold.”
Unlike most MLSs around the country, the NWMLS Clear Cooperation Policy does not allow for any form of private pre-marketing. Compass argues that NWMLS’s refusal to allow Private Exclusives amounts to illegal market control that limits options for both agents and consumers.
Compass is asking the court for a jury trial, damages and a permanent injunction to prevent NWMLS and any associated parties from engaging in these practices now or in the future.
Stay tuned to see how it unfolds.
