Plummeting Support for NAR’s Clear Cooperation Policy

NAR’s Clear Cooperation policy is back in the spotlight.

Now that the settlement reached by the National Association of Realtors® (NAR) has put an end to the trade group’s Participation Policy, another polarizing rule has taken center stage. 

NAR officials are meeting this week to discuss Clear Cooperation, otherwise known as the pocket listing ban. And while the lawsuits filed by The PLS.com and Top Agent Network (TAN) haven’t gotten as much media attention as Sitzer/Burnett, leaders and real estate groups across the industry have weighed in on the policy. 

The goal of Clear Cooperation was to crack down on “pocket listings,” with advocates of the policy defending it as necessary to improve equal access to available housing. On the other hand, critics argue that the policy is legally dubious and overreaching. 

Naturally, the Department of Justice (DOJ) is very interested in how this plays out. Here, we’re focusing on who in the industry is in favor and who would like to see the policy scrapped, along with the reasons given. 

Byron Lazine and Nicole White discussed the policy in this week’s episode (#334) of The Real Word. 

 Read on for the highlights. 

Industry voices in support of Clear Cooperation

In 2019, industry heavyweights such as Chicago area-based MLS Midwest Real Estate Data (MRED) and Bright MLS publicly supported the policy. And it’s not hard to imagine why. 

Fast forward to 2024, and support for Clear Cooperation has dropped from “overwhelming” to 28%. But plenty of big voices in the industry still argue for keeping the policy in place. 

Industry leaders in favor of Clear Cooperation:

• Glenn Kelman, Redfin CEO
• Leo Pareja, eXp CEO
• Stephen Brobeck, Senior Fellow with the Consumer Federation of America (CFA)
• Brian Boero, Co-founder of 1000watt

Reasons given: 

1. Pocket listings effectively block some consumers, especially minorities and buyers without powerful social networks, from considering certain homes or neighborhoods (assuming these buyers are unrepresented or have agents who are unaware of those listings and/or unable to access them). 
2. A centralized platform like the MLS will ensure a comprehensive, accurate, and robust marketplace for homes. (Leo Pareja, eXp CEO)
3. Companies such as Zillow “have created big consumer audiences around MLS data and earn significant parts of their revenue by referring leads to buyer agents.” (Brian Boero, Co-founder of 1000watt)
4. Private listings limit exposure to buyers, potentially resulting in lower sale prices for sellers and fewer options for buyers. 

Brian Boero, Co-founder of 1000watt, made the point in his blog that whether brokerages benefit or suffer from the Clear Cooperation rule depends on their structure. 

“Compass has been quite clear about their desire to become a listing destination. Given years of eroding margins, and the potential for commission compression in a post-settlement world, big brokers would like to keep as many transactions in-house as possible and fully leverage their hard-won market share. A critical mass of private, exclusive listings is also a big recruiting lever…A brokerage like Compass has concentrated market share in several key areas. Keeping more listings private will create more in-house deals for them. 

“Other big brokerages, especially those that are virtual, like EXP, have broad market share — lots of agents spread relatively thinly. In-house networks aren’t as powerful for them, and they are therefore more likely to support leaving CCP in place.”

Brian Boero

Co-founder

Industry voices opposed to Clear Cooperation

Industry voices against Clear Cooperation: 

• Austin Board of Realtors (ABoR) MLS
• Mauricio Umansky, CEO of The Agency
• Gary Gold
• Robert Reffkin, Compass CEO

Reasons given for opposing the policy: 

1. An agent should be allowed to market properties as they see fit, based on their agreement with the sellers they represent. Banning pocket listings is an example of micromanaging and treating agents like children. (Gary Gold, Trend-setting luxury real estate agent)
2. Sellers should be allowed to keep their identity off the MLS. They should also have the option of having their property listed to an exclusive audience, if they so choose. The seller’s agent can explain to them the trade-offs involved.
3. Reffkin describes the policy as “forced cooperation,” “anti-homeowner” and a “killer of value,” saying it’s ultimately doomed and pointing to the litigation surrounding it.

According to Reffkin, Compass is one of “nearly 70 brokerages” calling for an end to Clear Cooperation.

Aside from the debate over the policy’s impact on consumers and on the industry as a whole, it’s still up for debate whether or not Clear Cooperation has actually been effective in preventing pocket listings. So far, research results have been mixed. 

What’s best for consumers?

Real Word co-hosts Byron Lazine and Nicole White both agreed the Clear Cooperation policy reduces the options available to home sellers. And ultimately, what they both lean toward is whatever is going to best serve the consumer. 

As Byron notes, “If you think it should be up to the seller—that they should have the option of going off market, then that means you do not like Clear Cooperation, and you think the rule should go away.” 

Nicole made her stance clear, stating, “I think the rule should absolutely go away.” 

The conversation also touched on buyers, specifically how Clear Cooperation affects them and whether repealing the policy would put them at a disadvantage. 

“On the buyer side…there’s this thought that everything should be in a centralized location like the MLS. Is it bad for buyers to not have everything in one place? A couple things there: it’s not bad for the buyers that have an agent working pocket listings and working off-market data. Do you have a door-opener or do you have a professional buyer agent representing you, turning over every opportunity in the market?”

Byron Lazine

A skilled and competent real estate professional prioritizes communication and will go above and beyond to locate every viable option for their client. 

Watch the full conversation for more. 

This week’s NAR meeting will take place on Thursday and Friday (September 12-13) in Chicago and will include its Emerging Issues Advisory Board—a subgroup of NAR’s MLS Committee. 

The board’s 23 members work a variety of functions within the real estate industry, including as brokers, MLS executives, and in technology. The meeting is closed to the public but board members can invite interested parties to submit comments. 

Stay tuned for more as the story develops.