As “The Industry” extends its knock-down, drag-out fight about private listings into another year, it is perhaps a relief to know that it’s not going to be Robert Reffkin, the NAR, or MLSs who will ultimately decide the matter.
Agents will decide the matter. Because agents decide almost everything.
This is a simple insight we often forget. Most of what goes on in this business is about paying, cajoling, or exhorting agents to do things. Residential real estate is a business of carrots, not sticks. Agents — not executives, not those to whom power is ascribed, not the press, not random guys like me — will determine whether or not we enter an era defined by private listings.
Even Robert Reffkin knows this. He’s been huffing and puffing a lot for the past year, making his anti-CCP case nearly everywhere, to just about anyone, with great rhetorical liberty (CCP is against agents’ fiduciary duty to clients, against the NAR’s code of ethics, against homeowners’ rights, against puppies, ice cream, sunsets at the beach, the flourishing of human potential… OK, you get the idea).
But none of this matters if he can’t get his own agents on board.
Compass’s private exclusive program existed before the CCP was put in place. It will continue to exist whether the NAR turfs the rule, modifies it, or keeps it intact. Sure, it will be easier for Compass to grow this program without the CCP, but that’s not the thing that must happen.
What must happen is for a lot of Compass agents to begin handling listings in an entirely new way — in a way that may seem fundamentally illogical to them, and complicated to their clients.
The power of habit is intense in residential real estate. When agents get a listing, they put it on the MLS. It’s just how it’s done. Doing it differently seems like a lot to ask, however artfully the proposition is presented.
As of right now, we don’t know precisely how it’s going. Reffkin said a few weeks ago on CNBC that there were “5,500 properties available only when you work with a Compass agent,” but it is unclear whether or not that includes coming soon listings in addition to private exclusives. The San Jose Mercury News recently found that 8% of all listings (384 properties) in the San Francisco Bay Area were only available by working with a Compass agent.
One thing is certain: Compass is pushing hard on its agents to make this behavioral shift. “Private Exclusives” have been reframed as a component of a “3-phase marketing strategy.” A new client collaboration portal designed to reinforce this modality was released last week. Compass is very good at both marketing and technology.
But this remains an uphill battle — one that will be won or lost not by an NAR committee vote, but by Compass agents’ willingness to change how they sell homes.
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Another note on the CCP: We’ve heard many industry executives advance a sort of domino scenario, i.e.: “We don’t want to do private listings, but we’re going to have to, and all of our competitors will have to, if the CCP is repealed.”
Seems about right. But this is often a bluff. The impact of private listings will be felt where market share is concentrated, not spread thin. Compass is steadily progressing on what it calls its “30/30” strategy — 30% market share in 30 top markets. Many other large brokerages are a mile wide and an inch deep, which means they have no effective response to a Compass private listings free-for-all.
So if it seems that I am placing undue importance on Compass as the driver of this issue, well, I am.
Have a good weekend.
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