Industry insiders have been writing off the Clear Cooperation Policy — or at least its current iteration — as dead in the water.
The early funerary proceedings were stoked by court filings by the Department of Justice that appeared to spell the agency’s belief of the National Association of Realtors’ rule as anticompetitive, placing the rule in line with the agency’s tear of antitrust legal battles.
But a footnote from a DOJ supplemental statement of interest filed last week clarified the department’s view of CCP, while also reproaching “industry participants” for “misleading and out of context” statements about the DOJ’s “purported position” on the policy.
“The Division has not taken a position that such policies standing alone (i.e., without mandated MLS publication of offers of compensation or exceptions benefitting primarily large brokerages) are anticompetitive,” reads the note, which appears on page 7 of the filing.
The DOJ filed the supplemental statement of interest to signal its concern with a proposed settlement in a class-action lawsuit filed against MLS PIN for allegedly requiring sellers’ brokers to pay buyer agent commissions.
The latest statement marks somewhat of a turning of the regulatory tide since last year, when the U.S. Court of Appeals for the District of Columbia ruled that the DOJ could reopen its investigation of NAR despite a 2020 settlement.
In that ruling, which was part of the DOJ’s broader request to look into NAR’s policies, Judge Florence Pan wrote that the “DOJ believes that the Clear Cooperation Policy restricts home-seller choices and precludes competition from new listing services.”
The latest statement casts a divide down the middle of industry commentary.
Compass CEO Robert Reffkin has been by far the most pugilistic critic of the CCP, dismissing it as anticompetitive and calling for the NAR to end the policy. Reffkin has previously pointed to the DOJ’s supposed stance against CCP as another piece of evidence in favor of a repeal.
Supporters of CCP, like Nexthome CEO James Dwiggins, celebrated the DOJ’s most recent statement, calling it “a straight rebuke of Mr. Reffkin’s continued public statements about the DOJ’s position on CCP.”
“The industry should take note,” he added.
A brokerage of letters
Compass is in the eye of the policy debate, and the DOJ’s filing came in the same week as new details emerged on the brokerage’s back-channeling efforts in support of its CCP stance.
On March 18, industry expert Rob Hahn published a copy of a letter Compass sent to MLSes around the country urging them to reconsider their enforcement of CCP, in defiance of the existing NAR Policy.
“Your MLS is not giving adequate homeowner choice,” the letter read, adding that the platforms were subject to litigation risk.
It proposed several ways that MLSes could change their policies based on other listing services from around the country, ranging from not enforcing CCP to allowing agents to put their listings on the MLS as a “coming soon” without accruing days on market or syndicating to aggregators like Zillow.
The plea directly to MLSes is a different tact from Reffkin’s typical bully pulpit approach. Hahn, in his post, wrote that he thinks Compass has already won the war, pointing to member MLSes that already eschew the rule.
“If your own enforcers refuse to enforce the mandatory policy, or create workarounds so they can pretend like they have the policy when in fact they don’t [—] what’s the point of the charade,” he wrote.
Brown Harris Stevens CEO Bess Freedman revealed in an op-ed published last week that Compass sent her a cease-and-desist letter over her criticism of the brokerage and her allegations that the firm is attempting to increase the use of pocketing listings at the detriment to consumers.
“When a competitor writes an op-ed calling a company a Trojan Horse, the minimum response they should expect is a Cease and Desist,” a spokesperson for Compass said of Freedman’s article.
Vocal supporters, including Reffkin himself, have acknowledged that a CCP repeal would advantage larger brokerages. This perspective adds a layer to Compass’ interest, as it was reported to be in talks to buy Berkshire Hathaway’s residential real estate arm, HomeServices of America.
HomeServices executives have denied any such discussions for a deal, which would have added the country’s fourth-largest brokerage in HomeServices to Compass, the country’s largest.
For his part, Reffkin is posting through the called-off deal and the DOJ’s recent statement.
“There is clear and growing seller demand for Private Exclusives and off-mls public marketing,” he wrote on Instagram. “Consumer choice will win and the industry will follow.”