Compass CEO Robert Reffkin recently wrote an op-ed comparing agents in our industry to NCAA athletes whose images and likenesses were used without compensation prior to a recent Supreme Court ruling.
However, in his analogy, he says Zillow, the National Association of Realtors (NAR) and MLSs “benefit from work they don’t create.” But these are different issues, and the analogy doesn’t address the inherent hypocrisy of a private listings policy for which Compass has been the most visible beneficiary.
All of Compass’ targets are not the same
The issues Reffkin presents in his recent op-ed are worthy of discussion. What he misses is that NAR and MLSs serve a wholly different purpose from his legal enemy, Zillow. Both Compass and Zillow share a similar hunger for exploiting NAR leadership’s missing the mark during pivotal, cataclysmic shifts in homebuying and homeselling.
For example, when Zillow and Redfin — nationwide search portals — made the move to become brokerages, NAR should have created new policies that specifically exist for broker-portal hybrids. I agree with Reffkin; it is a conflict of interest when a company that pays our MLS for access to photos and data (that an agent pays for or creates) also uses that content to generate revenue by misrepresenting who the listing agent is and duping unknowing buyers into agency relationships.
What he says is true. As it currently stands, we cannot include our contact information in public remarks. We can’t include our branding in the images.
And as Reffkin writes:
“To add insult to injury, MLSs forbid agents from watermarking their own listing photos … while the MLS then adds their own MLS watermark to the agents’ listing photo. The MLS then sells listings to third-party internet portals that hide the agent’s contact information and monetize the listings by selling buyer leads to other agents.”
But Zillow was only exploiting a loophole to gain a competitive advantage, just like Reffkin’s company does.
How did we get here?
In 2011, the California Association of Realtors introduced legislation that allowed for office branch managers to supervise licensees. If brokers no longer oversee licensees on a per-office basis, or even locally, you can have one broker of record for the entire state. And indeed, that little rule allowed for the biggest companies in our industry to exploit the Clear Cooperation Policy to their competitive benefit.
What this means is that a big brokerage like Compass could and did create a private listing network for its over 8,000+ agents in California, an in-house listing network that only Compass agents and clients could access. Who wins? The dual agent wins financially, working both sides of the deal.
Does the public win? No. Equal access to the housing listings is stolen from the public. They could be forced to work with a company they don’t want to necessarily work with just to have access to those listings. How does that jive with “consumer choice” and “transparency”?
Does the agent community win? No. Inventory is sold without MLS entry and, therefore, it’s not accessible for comps. Agents get annoyed by their clients’ perception of “missing out” on private listings as access to listings becomes more segmented.
It is our industry’s duty to the public to ensure fair and equal access to listings as matter of fair housing and commitment to the higher value of homeownership as the American dream.
Who is Compass’ strategy meant to benefit?
Prior to Clear Cooperation, if a seller wanted to market off-market, since it is not illegal in the State of California, it would have been perfectly fine to do so. But once this policy was passed, we were encouraged to report violators, brokerages were getting fined for having their “coming soon” signs in the yards of their upcoming listings, and it felt like we, paying members of the MLS and our association, were being policed.
Fast forward to earlier this year when NAR didn’t repeal CCP, but rather created Delayed Marketing Exempt Listings (DMEL), a tweak to the rule that further allowed Compass and others to benefit from private listings.
Against this backdrop, Zillow debuted a listing ban for listings that aren’t publicly marketed in one day. Zillow, the nation’s No. 1 site for buyer home searches, is trying to protect its assets, namely, the listings that belong to agents.
Reffkin calls foul? I call checkmate.
“To enforce this restrictive system, MLSs fine agents up to $5,000 if the agent markets off the MLS, and now, Zillow bans listings if the agent markets off Zillow. Much like the NCAA once justified its anti-competitive regulations as a way to protect fairness for student-athletes, Zillow, NAR and MLSs defend their policies as a way to protect consumer transparency,” Reffkin writes.
Personally, I find it rich that a company that created a nationwide marketing strategy convincing sellers to market to fewer homebuyers than on the open market would even blink at a company excluding inventory that has been privately listed.
But these are confusing times. I thought I hated Zillow for having many years to build their business on the back of our own. And now I can’t believe it is actually Zillow, not NAR, who has finally caused our industry to look closer at the issues this policy has caused.
Reffkin’s fight with Zillow is personal
I do agree with Zillow — it has the right to exclude private listings from its feed if it wants to, just like Compass, under Clear Cooperation, has the right to pull inventory off the market and try to double-end it first before releasing it to the public.
We pay for membership to NAR, though it creates policies that enable our competition to literally, in front of our faces, create a private listing network that competes with the MLS, or creates a nationwide search portal that makes its income off using listing agents’ photos to solicit leads and sell them back to the agents.
But NAR also serves other purposes. Lobbying. Organizing. Creating professional standards. They need to be faster and more responsive to industry concerns and issues. To have our backs when we are being threatened, as we currently are, by more hungry lawyers claiming Clear Cooperation as their anchor.
One cannot confuse changes that need to be made at the MLSs and NAR with Reffkin’s personal fight with Zillow.
As the partner of a former NCAA Division 1 football player whose likeness was used without compensation, I understand the analogy Reffkin attempted to make. But there’s a fundamental difference: Student-athletes truly were victims of a system that exploited them.
Reffkin is no such victim. His company has been the clear beneficiary of failed NAR policies and is only conflating multiple frustrations to confuse the audience into thinking his struggles are ours. Let’s not throw the baby out with the bathwater: Repair our broken system, fix the inadequacies, apply the rules equally and let brokerages decide if they want to play with the team or not.
Courtney Poulos is the broker-owner of ACME Real Estate, a boutique firm based in Los Angeles. Connect with her on Instagram and LinkedIn.
