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Finally, the saga of the commission’s crimes seems to be entering a new chapter. The big names have settled in, new regulations have been issued, and while the unknown, the big question of the past – Will the industry collapse? — answered (the answer was yes).
But that doesn’t mean the battle over real estate laws is over. Enter Clear Collaboration.
Clear Cooperation is a policy of the National Association of Realtors that requires agents to submit their listings to their NAR-affiliated multiple listing service. The goal of the policy was to eliminate “package listings,” which are privately marketed properties, but which were classified from the start. Some heralded it as a way to promote equal access to housing, but others criticized it as legally questionable or an example of petty management.
This policy faded somewhat as a matter of course during the commission’s hearings. But later this week, the NAR committee will return to the policy to begin considering whether it needs to change — or end entirely.
It remains to be seen what will happen in this meeting. But Clear Cooperation remains the focus of federal regulators, still dividing the industry, and with other antitrust lawsuits in the rearview mirror, it may represent the next and biggest frontier in the fight against real estate’s future. In other words, it quickly becomes i take out du jour when it comes to questions about how agents live, work and get paid.
What is really happening now?
The upcoming NAR meeting will be held in Chicago on Thursday and Friday and will include the Association’s Emerging Issues Advisory Board, a subgroup of the NAR MLS Committee. The board includes 23 members who serve as brokers, MLS managers and technicians, among other things. The meeting is closed to the public, but the board may invite interested parties to submit comments.
A meeting can lead to different results. The Board, for example, may choose to refer the matter to the MLS Committee for further action or to another governing body within the NAR. It may also choose to continue gathering information, including but not limited to during its upcoming NAR NXT conference, which will be held in Boston.
The board meeting therefore does not guarantee any particular outcome but is the first step if some change will eventually take place.
In anticipation of the meeting, the WAV Group has conducted research on specific interactions in recent days. The survey received 670 responses from brokerage members, MLS leadership and MLS staff. According to the survey statement, 28 percent of respondents recommended keeping the law as it is, while “the majority want to change or remove the policy.”
“Interest in removing the policy entirely or making it optional and reusable varies among MLSs and brokerages,” WAV Group also reported. “51% of the respondents from brokerages recommend that the policy be removed. 40 percent of MLS respondents suggested making the policy optional and/or reworking the policy, a key response from MLS leaders and staff.”
The history of polarization
This week’s meeting comes five years after NAR adopted Clear Cooperation with strong support from the organization’s board. The law specifically states that “within one (1) business day of marketing the property to the public, the listing agent must submit the listing to the MLS for cooperation with other MLS participants.”
However, without broad support from the NAR board, Clear Cooperation has been divisive. Other industry heavyweights, such as Chicago-based MLS Midwest Real Estate Data (MRED) and Bright MLS, publicly supported the policy in 2019. Redfin CEO Glenn Kelman has also been an outspoken advocate for delisting and passing Clear Cooperation. .
But some industry statistics do not support this rule. They include the Austin Board of Realtors (ABoR) MLS, and prominent brokers such as Mauricio Umansky and Gary Gold – the latter oppose the ban on pocket listings saying agents should not be “treated like children.”
Much of the debate in 2019 focused on issues of privacy and equal access to housing. On the other hand, agents like Gold argue that real estate agents have the right to keep their homes and their ownership out of the public eye. They also say agents should be allowed to market properties as they see fit.
However, others argue that by keeping listings private, other buyers – especially younger ones and those without strong social networks – are effectively blocked from considering certain homes or neighborhoods. Proponents also argue that consumers generally benefit from having all the listings in one place.
One of the most pressing questions about clear cooperation is whether or not the policy actually works. So far, the results seem mixed.
Two years after the NAR approved Clear Cooperation, for example, Inman reported that pocket listings remained normal despite the clear cooperation. Redfin found similar results, revealing in December 2021 that 43 percent of agents felt that pocket listings had changed. More common after the acquisition of Clear Cooperation. About two years later, in 2023, Redfin’s Senior Director of Operations Joe Rath told Inman Clear Cooperation that it might backfire.
Last week, Inman contacted Jonathan Miller – president and CEO of Miller Samuel, Inc. – who tracks the listing of the package in Los Angeles. Miller found that such listings seem to be trending down as a share of the overall listing.
Credit: Jonathan Miller
However, when asked about the cause of this downward trend, Miller pointed to a soft market and the so-called “property tax.” That said, it’s not clear what the relationship is between the decline in Los Angeles packet lists and Clearing the Cooperative exactly.
An important part of the industry’s ongoing legal saga
Clear Cooperation recently overturned the defunct NAR participation rule, which required sellers’ agents to provide compensation to buyers’ agents. This law was the focus of many cases against the commission. That litigation and subsequent settlements led to new NAR procedures and the end of the Participatory Act.
However, another unknown yet to unfold in the wider commission saga is the US Department of Justice – and the DOJ has a vested interest in Clear Cooperation.
The DOJ is currently locked in a legal battle with the NAR that began in 2020 over the lawsuit and was announced at the same time as the settlement. The DOJ later withdrew from the settlement and restarted its investigation, focusing on both the Participation Act and Implicit Cooperation. This legal battle may now be heading to the US Supreme Court. The bottom line is that the Participation Act is gone but the Clear Partnership is gone, which sets the stage for further wrangling over this issue.
Clear Cooperation is also the subject of other legal proceedings. Private listing networks PLS.com and Top Agent Network (TAN) have both complained about this policy. Last month, the court set a trial date for Nov. 3 in the case of TAN. Clear Cooperation is part of Homie’s lawsuit against NAR.
The battle lines have been drawn
A number of key players have taken up the issue recently.
Robert Reffkin
One of the most prominent is Compass CEO Robert Reffkin, who used his company’s recent earnings call to describe the policy as “anti-homeowner” and a “value killer.” Reffkin also pointed out that Clear Cooperation is about to end, pointing to legal proceedings on the matter.
Last week at the RISMedia event, Reffkin again criticized Clear Cooperation, describing the policy as “coercive cooperation” and urging the NAR to end it.
Compass also told Inman that it is one of “about 70 consumers” who want Clear Cooperation terminated.
Inman reached out to a sample of companies and individuals who might oppose Clear Cooperation, but those who responded declined to comment on the record. However, part of the argument against the law seems to be that it stifles restarts and opens the industry up to large and disruptive lawsuits.
A WAV Group survey pointed to similar problems, noting in a statement that “consumers interested in removing the policy were most concerned about the creation of another round of litigation.” The survey also found that support for removing Clear Cooperation was high among large brokerages.
Leo Pareja
But not everyone wants to join Clear Cooperation. For example, eXp Realty CEO Leo Pareja also appeared at the RISMedia event and said he disagreed with Reffkin.
“I’m a big believer in organized real estate and how it works in North America,” Pareja said. “We have a complete, accurate, fluid market, which is the beauty of the MLS.”
When Inman contacted eXp for comment, the company provided a statement from Holly Mabery, senior vice president of broker operations, who said “a centralized platform like the MLS” will ensure a “complete and robust market.”
In an email to Inman last week, Consumer Federation of America Senior Fellow Stephen Brobeck spoke in favor of Clear Cooperation.
Stephen Brobeck
“In most cases, it’s not in the best interest of sellers or buyers for a seller to only promote listings within their agency,” Brobeck said. “Sellers are likely to get a lower selling price, and the buyer’s choice is limited to a limited group of properties.”
Brian Boero, CEO of real estate branding and strategy firm 1000Watt, also weighed in in a blog post on Friday. Boero expressed his support for this goal, saying that Clear Cooperation “must stand, and fight.” But his comments were also notable for breaking down the battle lines in the debate. Companies like Zillow, he said for example, “have created a large audience of buyers from MLS data and derive significant portions of their profits from referring buyer’s agents.” According to Boero, they have an incentive to maintain Clear Cooperation.
On the other hand, whether brokerages benefit or suffer from this law depends on their structure, said Boero.
Brian Boero
“A business like Compass has it it is concentrated market share in many key areas,” he said. “Keeping more listings secret will create more insider deals for them. Some large brokerages, especially real ones, like eXp, have them wide market share – many agents spread slowly. Indoor networks are less powerful for them, so they are more likely to support mobility [Clear Cooperation] in the area.
Boero also wrote that MLSs may support Clear Cooperation because they “don’t want another piece removed from their Jenga tower.”
Time will tell if the pressure to change Clear Cooperation ends up amounting to anything. But Boero’s analysis highlights how the issue intersects with different parts of the industry in different ways. And that means the pressure to change isn’t likely to abate anytime soon.
Email Jim Dalrymple II
