Calling BS on the Anti-CCP Argument

The assault on Clear Cooperation Policy feels like all anyone is talking about over the last couple of months. AREA launched a petition to end it, but the most vocal critic has no doubt been Compass CEO Robert Reffkin. While in Seattle at CMLS, he spoke about "how the MLSs can improve." No surprise, his answer was to rid the MLSs of CCP...

With Clear Cooperation removed, MLSs will need to earn their business, not force it. This will result in MLSs needing to ask agents & homeowners what they can do to make the MLS a better place to list. Homeowners will ask for options to reduce the risk of MLS exposure - no days on market, no price drop history, no price, no address, no syndication to aggregators that divert buyer inquiries away from their listing agents - all features that Compass private exclusives offer based on homeowner feedback. This will lead to more inventory on the market as the risk of MLS exposure is removed. More inventory will be good for everybody.

For MLSs that treat agents and homeowners like clients and don’t enforce Clear Cooperation, Compass will support them in every way possible to grow and expand - providing a data feed of all Compass listings in the US, asking other brokerages to provide them with their national data feeds, and helping the MLS expand to other markets where MLSs are enforcing Clear Cooperation.

Approximately 50% of our markets are in MLS regions that don’t enforce Clear Cooperation. These are markets where the MLS understands that the Clear Cooperation Policy violates NAR’s Code of Ethics, forces agents to break State privacy laws, and interferes with the agents relationship with their clients. The MLS should not be an enforcer of NAR rules.

Come on, what straight spin all of that is. As Brian Boero said, be honest about this. Repealing CCP has nothing to do with a homeowner's best interest, and everything to do with Compass' best interest. Generating leads, without paying the portals a tax. More pocket listings is a path to more leverage, and as the largest brokerage already leveraging pocket listings, Compass stands to gain the most if the policy is exiled.

If the CMLS talk didn't set off enough alarm bells, Reffkin took to CNBC last week, and when asked about the housing market conveniently pivoted the conversation directly to home sellers being disadvantaged by CCP. Listen to the whole interview, or read his Instagram post for the CCP argument.

I'm flabbergasted someone in leadership can make the argument home sellers are hurt by CCP. I'm sorry, not for a second do I buy that argument. Provide me data--any data--showing it's in the seller's best financial interests to keep their listing off the MLS. I'll wait here, for eternity I suspect. And the CCP is most certainly not the reason new homes sales are strong and existing homes sales are falling. The data showing new homes completed are up is a far more plausible reason. Beyond that, new construction being up and existing sales being down has a heck of a lot to do with one of the first lessons I learned at Zillow in 2006: homeowners are irrational in their decision making (such as not lowering list prices now). Meanwhile, builders are making rational financial decisions. Homes that are priced right, will sell. End of story.

If CCP is killed by the guillotine, every brokerage in the country will be running a pocket listing network. Way back in 2005 inside Zillow, the "features" Reffkin touts that Compass private exclusives offer (no days on market, no price drop history, no price, no address) were the exact real estate search realities we heard over and over as the sh*t buyers hated. All were used to force buyers to contact agents. At Zillow, we built our early audience and brand by not caving on those issues simply because some agent or broker wanted to use them to generate leads. Sure, there are celebrities that have privacy concerns. But, the notion that homeowners are demanding these features in droves is downright laughable--as is the idea that removing CCP will increase inventory.

Does the industry really want backtrack twenty years by making all those crappy features the norm again for home buyers? Is putting shackles on the home buyers who pay the bills for the entire industry really such a wise strategic decision?

Take a wild freaking guess where I stand.