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The polarizing 2019 Clear Cooperation policy adopted by the National Association of Realtors is failing, two high-ranking brokerage leaders charged during a panel Wednesday at Inman Connect Las Vegas.
Redfin Senior Director of Brokerage Operations Joe Rath and NextHome CEO James Dwiggins agreed that rather than receding, pocket listings have increased since the enactment of the Clear Cooperation Policy, with the Redfin executive even saying his company was “strongly considering” deploying exclusive listings in the face of an industry that appears to be ignoring NAR’s mandate.
“If other brokerages are going to use it, then Redfin may have to use it, too,” the Redfin executive said during a panel entitled “Is Clear Cooperation Working the Way We Hoped it Would,” moderated by Vendor Alley blogger Greg Robertson.
Clear Cooperation, which among other stipulations, requires a brokerage to put a property on the multiple listing service within 24 hours of advertising it, was touted as an effective ban on pocket listings while also offering some exceptions, like “office exclusives,” that are only marketed internally to in-house colleagues.
In essence, the trade organization’s policy is designed to govern the public marketing of listings and their entry into multiple listing services.
Dwiggins, the California-based NextHome founder, said reducing the industry’s deployment of pocket listings — which he dismissed as “not good for anyone” — would require the elimination of dual agency transactions, or deals involving the same party on both sides of the sale, to slow the circulation of the illicit listings.
“Dual agency is a bad idea,” Dwiggins told a crowd inside the Aria Resort & Casino. “It should be banned in all 50 states. It’s currently banned in nine. Do that and Clear Cooperation won’t be needed as much. It’s not being enforced at MLSs.”
Dwiggins said those who oppose Clear Cooperation have few arguments for their position — other than that exclusive listings benefit their brokerages.
“I’ll say it,” Dwiggins said. “It’s designed to keep as much business in the brokerage as possible.”
Rath raised the specter of pocket listings being used as a cudgel against smaller independent brokerages, with larger brokerages using the exclusive listings they control as a recruiting tool. He added that, like inquiries into commission structures raised by plaintiffs in several class-action lawsuits, Clear Cooperation is what happens when the industry shifts away from the best interests of the homebuyers and sellers.
“That’s inevitably what we’re talking about,” Rath told the crowd. “If we don’t change some of these rules, you’re going to see the [Federal Trade Commission] or someone else one come in and do it.”
“The way we stop having some of these investigations is to start doing what’s best for the buyer and seller in this process,” Rath added. “I’m not saying the Clear Cooperation policy is bad — I think it’s a well intended policy — but I think how you govern that nationally when its implemented differently in each MLS is a very difficult thing to overcome.”
Robertson nudged Rath back to his earlier statement suggesting Redfin might one day implement exclusive, in-house listings. “So, sometime in Q4?” he asked?
“If we do it,” countered Rath, “it’ll be done the Redfin way.”
