"Utter Nonsense": Realtor.com CEO Weighs in On CCP Debate But Stops Short of Listing Ban

The NAR-affiliated U.S. real estate portal Realtor.com has weighed in on the ongoing debate about private listings and the Clear Cooperation Policy via an opinion piece penned by CEO Damian Eales on the company's blog site.

Entitled 'If you want to catch a big fish, avoid small ponds', the article comes down heavily in favour of the National Association of Realtors' Clear Cooperation Policy which mandates that any listing marketed publicly must be listed on the MLS and distributed to sites like Zillow, Realtor and Redfin, within one business day.

The Realtor boss, who has now been in charge of the News Corp-owned portal for two years, was scathing in his assessment of agents and brokerages looking to persuade sellers that listing privately is a smart option saying that the idea that fewer eyeballs on a property means a better sale price was "utter nonsense".

Referring to his own efforts to sell a house in his native Australia, Eales pointed out the unique nature of the American real estate listings system in which sellers do not pay for their property to be listed and claimed that private listings may well lead to litigation and a negative perception of the whole industry.

"Brokers who facilitate private marketplaces are likely to find themselves on the wrong side of history by putting themselves in the bullseye of litigation from both sellers who feel shortchanged, as well as buyers who claim they were selectively excluded from seeing a property. Our industry needs neither the reality nor the perception of the type of steering that Newsday exposed in 2019, the same year the Clear Cooperation Policy was adopted.

Selling a secret is no way to start a bidding war and will surely result in shortchanged sellers, and at the same time may be used by the less scrupulous for steering."

Unlike Zillow and Redfin which have both unveiled plans to exclude listings that are not uploaded to the MLS, Realtor is required to show all listings because of the direct nature of its relationship with MLSs via the National Association of Realtors (NAR). However, Eales' comments did hint that the portal could exclude listings in some cases if regional MLSs "want us [Realtor.com] to better to enforce the principles and policy of Clear Cooperation".

The portal boss's article comes amid an ongoing war of words following a recent amendment to the NAR's controversial Clear Cooperation Policy. Since March brokerages have now effectively been free to create an inventory of 'exempt' private or 'pocket' listings which they can market off portal sites.

Compass, the largest brokerage in the U.S. by GTV, has championed this approach and its CEO Robert Reffkin has been vocal in his criticism of the Zillow and Redfin policies. In a LinkedIn post from Monday, the brokerage boss was again critical of Zillow, saying:

"Zillow doesn’t want any listings outside of its platform because Zillow can’t make money from listings it doesn’t have. Zillow isn’t protecting the consumer, Zillow is protecting their business model.

Zillow’s business model is to alter, amend, modify, and monetize the home sellers listing without their permission."

Although seemingly ideological in nature and framed as sellers' choice vs an open market for buyers, both sides of the debate appear to be protecting their businesses. While Homes.com's parent company CoStar has sided squarely with Compass saying that Zillow's move to exclude private listings was a "pure power play of epic proportion", most brokerages have either backed the NAR's stance or are sitting on the fence.

The stage is set for a showdown when Zillow and Redfin's policies come into force later in the year. Although Realtor.com is ideologically aligned with the two portals, Eales' article confirms that it will not exclude private listings from its site and may be seen as a small win by Compass execs.