In the ever-evolving world of real estate, policies come and go, but few have sparked as much debate as the Clear Cooperation rule introduced by the National Association of Realtors (NAR). This policy was initially designed to limit pocket listings—homes that are marketed outside the Multiple Listing Service (MLS)—to ensure all properties are available to the general public. But is it working as intended, or is it restricting sellers and their agents?
As a realtor who worked in California during the early days of this policy, I’ve seen firsthand the issues it presents. California, particularly Los Angeles, was one of the leading markets for pocket listings. When the Clear Cooperation rule was first proposed, the intention was to create transparency and fairness in the market. The idea was simple: if a property is available, everyone should know about it. But in practice, the rule has had some unintended consequences.
Why the Rule Was Created
The Department of Justice (DOJ) has had concerns about pocket listings for some time, and NAR’s Clear Cooperation policy seemed like a reasonable step to crack down on these “secret” listings. It aimed to prevent unfair advantages where only a select few, often those with the right social connections, knew about certain properties. This especially affected minority buyers and those without strong networks. By making MLS listings mandatory, the policy aimed to give everyone a fair shot at homeownership.
The Seller's Perspective: Is It Fair?
However, from a seller’s point of view, this policy can be limiting. Not every homeowner wants their property blasted across public listings. Some sellers, particularly those in high-end markets or who value privacy, may want to test the waters quietly or control the marketing strategy more tightly.
Under the current rule, once a seller signs a listing agreement with an agent, the property must go on the MLS within 24 hours. The only exception is for office exclusives, which still restrict marketing within the listing agent’s brokerage.
Here’s the issue: what about the seller’s right to choose how they market their home? Sellers own their property, and for some, putting their home on the MLS isn’t the best option. They may want to gauge buyer interest without committing to the full public exposure that MLS brings. Forcing a seller into a marketing approach that doesn’t fit their situation can sometimes do more harm than good.
Business Perspective: The Agent's View
From a business standpoint, agents also face challenges. Agents work hard to build a network and create value for their clients. One of the ways they do that is by finding exclusive opportunities—homes that are not yet on the market. Clear Cooperation can make it difficult for agents to offer this kind of value.
Let’s be clear: MLS is a powerful tool, and for most sellers, it’s the best way to reach a broad audience and maximize their home’s value. But in certain situations, a pocket listing might be the better route.
For instance, let’s say you have a luxury home where privacy is key. Maybe you have a client who wants to test the market quietly before fully committing. With Clear Cooperation, these options become far more difficult. You, as an agent, lose the ability to offer those exclusive insights to your buyers.
National Lawsuits: A Contradiction in Policy?
The debate over Clear Cooperation isn’t just limited to what happens inside the industry. National lawsuits are now challenging how real estate practices are structured, particularly when it comes to commissions and agent behavior. One of the key arguments in recent lawsuits is that agents have been accused of conspiring to keep commissions inflated, which limits a buyer’s ability to negotiate. These lawsuits, including a high-profile case involving NAR, argue that commissions should be fully negotiable and not a fixed standard.
Here’s where the contradiction comes into play: on one hand, there’s a push for more negotiation and transparency in how agents handle commissions. This lawsuit suggests that the real estate industry needs to open up more options for consumers. But at the same time, policies like Clear Cooperation are restricting homeowners by limiting how their properties are marketed, forcing them into a one-size-fits-all MLS listing structure.
As Tom Toole pointed out in a recent podcast, you can’t have it both ways. You can’t say agents are conspiring to inflate commissions and argue that everything in real estate should be negotiable, and then turn around and have a policy that restricts homeowners across the board. If we’re going to embrace a truly free market where everything—from commissions to marketing strategies—is open to negotiation, then Clear Cooperation needs to be part of that conversation. It’s about giving both agents and sellers the freedom to make decisions that work best for them.
The national lawsuits are aimed at creating more flexibility in the market, and policies like Clear Cooperation seem to stand in direct contrast to those goals. It will be interesting to see how this plays out as the DOJ continues its investigation and these lawsuits progress.
The Debate Continues
This debate is ongoing, and there are strong opinions on both sides. Big players in the industry, like Redfin and EXP Realty, are divided. Some believe that all homes should be available to the public, ensuring equal access for all buyers. Others, like Robert Revkin of Compass, argue that the policy is unfair to sellers and strips them of their right to control their home sale process.
The DOJ is watching closely, and NAR’s secretive meetings have sparked speculation about whether Clear Cooperation could be modified or eliminated. Some brokerages are already requesting that the policy be abolished entirely.
So, What’s Next?
As the debate rages on, it’s important to remember that real estate is about choice. Sellers deserve the right to choose how their home is marketed. Agents deserve the freedom to offer value through exclusive opportunities. And buyers deserve transparency in the market.
While the Clear Cooperation rule may have been created with good intentions, it may not be the best fit for every market or client. As real estate professionals, we need to remain flexible and adapt to the needs of our clients, while also staying informed on policy changes and industry trends.
If you’re a seller or buyer curious about how this affects your home sale or purchase in Southwest Colorado, reach out to me. I’ll provide you with the latest insights, so you can make an informed decision based on your unique situation
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For further details on market trends and to explore opportunities in Southwest Colorado, feel free to contact me. Let’s navigate these changing times together and find the best deals tailored to your needs.
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