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We can’t keep debating the consumer benefits of Clear Cooperation, the National Association of Realtors’ policy against pocket listings. The data is clear that sellers get higher prices by publicly marketing listings and that buyers, especially buyers of color, want to see all the homes for sale.
One reason Clear Cooperation is under attack: To create monopolies
The debate distracts us from the deeper issue: Why has America’s largest broker campaigned for a homeowners’ right to market their property as a pocket listing? We can’t be too polite to consider one answer that has overwhelming business logic: to turn a market into a monopoly.
Imagine tens of thousands of the most desirable listings, pocketed
We focus so much on the exceptions that could rationalize pocket listings, like listing Oprah Winfrey’s house, that we forget that pocketing desirable listings could, in some neighborhoods, become the rule, with as many as a third of listings inaccessible to most homebuyers. With new pressures on buyers’ agents and a long-term listing shortage created by interest-rate volatility, there are more incentives than ever for a broker to pocket listings.
Lower splits, high fees
Without reasonable data cooperation policies, an agent about to leave a big broker in search of a better deal may stop short if her clients can no longer access the big brokers’ listings. And with homebuyers now asking, “Why should I pay you 3 percent?” the response the big broker may have in mind is “to see listings no one else has.”
Every monopolist starts by controlling inventory
Imagining that a broker wants inventory control to create a competitive advantage isn’t a far-fetched theory or even an imputation of dastardly intent. It’s a strategy as old as business itself. It explains why Ticketmaster can take so much money from each concert, Uber for each ride, Spotify for each song.
When size matters, the little guy loses
Once a marketplace has the most exclusive inventory, be that in shows or songs, it seeks more money from the people producing the show or the song. The standing a marketplace has to get more is known as “the take rate,” and in real estate, the person the money’s being taken from is you, the agent, and also, of course, the consumer.
Historically, big brokers haven’t been able to get big splits
Historically, our industry’s take rates have been low: Brokerages earn modest margins on the sales sourced by our agents, and the agent keeps most of the money. Since all brokers have access to the same inventory, brokers compete by giving agents higher splits or better support.
Clear Cooperation is good for agents, too
But without strong data cooperation policies, agents will rush to join the biggest broker in town, even at lower splits, just to ensure their customers can see all the homes for sale. The goal in weakening Clear Cooperation is to make being bigger matter — more than being better. That is the law of the jungle, masquerading as freedom.
Why we all share
And boy oh boy, do cooperation’s opponents love talking about freedom, as if getting more MLS data than you give should be added to the Bill of Rights. When you remind a broker that it has the ultimate freedom, to leave the MLS, the broker immediately objects that this is impractical: No one can compete without sharing listings. But that is what that broker is asking others to do: To compete without the listings that the broker has withheld from the MLS.
The MLS no longer facilitates fee cooperation
Cooperation’s opponents go further, saying their campaign is to save our industry from another antitrust lawsuit. One broker cites as evidence a Department of Justice filing from 2023, but that was when the MLS was still facilitating fee cooperation. Any brokerage now purporting to speak for the Department of Justice without working there is probably advancing its own agenda. The way to address antitrust concerns isn’t by letting brokers monopolize listings.
Clear Cooperation probably won’t be overturned, but it could be weakened
And yet, after so much costly litigation, NAR, which fought like lions against formidable opposition, seems ready to lie down like a lamb against an imagined foe, even on an issue where it’s on the right side of consumers. Instead of overturning Clear Cooperation completely, NAR may say, “Let each MLS decide,” an echo of “Let the states decide” from a Supreme Court decision.
But where citizens of Idaho and Oregon may differ on legal issues, we all want a complete view of the market. The only local differences in pocket listings will depend on which MLSs have to cater to a broker with dominant local share by dismantling cooperation.
A compromise that’s just another way to kill the MLS
The other way to undermine data cooperation is to give agents two weeks before adding a market-ready listing to the MLS. This may have been intended as a reasonable compromise by another of America’s largest brokers, but it won’t work when more than 40 percent of listings go off-market in two weeks or less. The other 60 percent are the ones no one would pocket anyway because they’re a slog to sell. An MLS of only stale listings isn’t an MLS at all.
The reason organized real estate exists is to create a fair and open market
To stand up against the special interests of a broker that dominates its markets, we need an organization that’s national, not local. How can we compromise further when the existing policy already allows office exclusives for sharing pocket listings within one broker’s office? What do we have a national organization for if not to make policy decisions that benefit the whole market, both agents and consumers alike? We should strengthen, not weaken, Clear Cooperation and end the exception for office exclusives.
The MLS is the best way to protect homeowner privacy
The irony of the position held by Clear Cooperation’s opponents is that even the benefits they imagine getting for consumers could best be achieved via the MLS. Most MLSs today already give listing agents an option to market listings through other brokers but not via the Internet or to publish photos before a sale and then delete them afterward.
Brokers have tried before to protect our clients’ privacy outside the MLS by playing whack-a-mole with dozens of real estate websites. It was a disaster. And since the MLS has removed commissions, the MLS is the best way for an agent to get their listings on every brokerage’s website without having to offer anyone a fee.
If the rules allow pocket listings, Redfin will support customers’ choice to keep listings outside the MLS. But we won’t like it
No matter how the rules on pocket listings change, Redfin will adhere to those rules, using the same competitive weapons that our competitors use against us. Redfin, like the vast majority of brokerages in America, would much prefer that the rules treat listings as a sacred trust, marketing properties to benefit buyers and sellers, and in a way, that’s fair to brokers big and small.
Glenn Kelman is the CEO of Redfin, a technology-powered real estate broker.
