A Phil Hall Op-Ed: Dark clouds have formed around the National Association of Realtors’ (NAR) Clear Cooperation Policy, with many prominent figures within the real estate industry calling for it to be jettisoned. However, it seems like an equal number of prominent figures are calling for its preservation. How this issue shakes out could very well determine the future of NAR.
The NAR policy is relatively new – it was only established in 2020 – and it mandates that listing brokers upload their publicly marketed listings within one business day to an MLS. NAR argues the policy works for sellers seeking to reach the widest number of potential buyers. The organization also claims that not having this policy creates so-called pocket listings that create an exclusionary market where sellers could lose money and minorities would not be able to have access to certain listings.
One of the most vocal supporters of the Clear Cooperation Policy is Redfin CEO Glenn Kelman, who posted on a company blog that brokers opposed to this policy “would rather promote pocket listings as a way to justify high fees and to build their own businesses. The brokers who oppose Clear Cooperation still want to post pictures of the listing to the Internet, but only on their own site. This puts the broker first and the customer second.”
On the other hand, the folks behind the American Real Estate Association (AREA) have taken aim at the policy, first with a petition drive to rally industry opposition and then by announcing it might begin a class action lawsuit against NAR’s policy because of damage it allegedly created. The AREA petition statement claimed realtors are forced to adhere to the policy even if their clients are opposed to it.
“This overreach by NAR strips away homeowners’ control over how and when to promote their properties, severely limiting their ability to attract offers that may be more aligned with their privacy needs or financial goals,” said AREA’s petition, adding that real estate agents who don’t follow the policy “face penalties of up to $5,000 simply for following the wishes of the homeowners they are sworn to serve.”
More unhappiness with NAR came from Utah, as the Park City Board of Realtors announced it will stop enforcing the Clear Cooperation rule. While this is not among the largest realtor organizations – the Utah MLS has slightly less than 1,800 subscribers – it could be the first crack in the wall holding up the policy.
And even the U.S. Department of Justice (DOJ) has voiced potential antitrust concerns over the policy, which was among the reasons that it is trying to junk its 2020 settlement with NAR and reanimate its investigation of the organization – NAR is trying to get the Supreme Court to weigh in on the DOJ’s actions.
NAR is not oblivious to the tumult this policy is creating. Last month, the organization’s MLS Technology and Emerging Issues Advisory Board raised the issue of the Clear Cooperation Policy by reviewing input from various industry stakeholders on whether the policy should be retained, erased, or rewritten in a compromise designed to please all parties. That meeting did not offer any clue on how NAR will proceed, and more meetings are planned.
How will NAR respond to the pressures on this policy? In my humble opinion, NAR will not rush to a decision, but rather try to take a wait-and-see approach. And I suspect time could be NAR’s ally.
After all, a Trump election victory next month will most likely result in new leadership at the DOJ that will drop the plans to tear up the 2020 agreement, while a Harris victory would then leave it up to the Supreme Court to stop the DOJ’s probe into the policy – which is likely since the conservative-leaning court has been frequently critical of how the Biden-era DOJ hase behaved.
As for the class action lawsuit threat from AREA, it is difficult not to wonder if this threat was simply an attention generating stunt by the start-up organization – their petition drive has yet to reach its 5,000-signature goal and its would-be social media campaign to encourage the use of “#EndCC” was a flop. And unless a regional group larger than the Park City Board of Realtors revolts against the policy, it will be business as usual among the realtor groups.
Of course, there could be an unexpected development that could doom the policy faster than anyone anticipated. But until that comes, I am of the opinion that the Clear Cooperation Policy will not be altered or canceled anytime soon. But that’s my opinion – what do you think?
Phil Hall is editor of Weekly Real Estate News. He can be reached at [email protected].
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nar needs to be disbanded…. there’s actually no good policy on the nar book anymore…..it created its own Extinction……if they can’t protect the commission’s, what good are they and why do they deserve any additional payments from hardworking Realtors. its time for the national association of Realtors to go bye-bye, once and for all.
Being in the real estate business for 20+ years, I do not know of any positive attribute that NAR contributes to Realtors.
As described, the NAR “Clear Cooperation” policy is a regulatory mandate that carries punitive measures against those who don’t comply … just like big government bureaucracies.
In a free market, the best ideas and practices will prevail without regulatory mandates or intervention. Toward that end, if the process dictated by NAR’s “clear cooperation” policy is actually better for the clients, then the brokers who incorporate those practices into their business will be more successful.
In any event, one size does not always fit all, so brokers should be free to conduct their business in the manner they believe is in their clients’ best interests. Determining when and how to post listings on MLS, or not, should be a decision made by the seller and their agent, not dictated by NAR or MLS.
NAR is a dinosaur in a new age. They have gone the way of any bloated self serving group. The only thing they had was mls exclusivity but sold that off to Zillow et al. Then there’s the settlement fiasco. So much for the industry as we knew it. Adapt or there’s always McDonalds
Realtors were informed many of years ago that commissions are NOT FIXED and are NEGOTIABLE. Also, a Broker can spend their earned commission as they wish, especially when it’s in their client’s interest, as it is when they can expose their listing to the greatest market. Their Client has the option to drop out of the Multiple Listing Agreement if they choose, but how does that benefit them?
I don’t think NAR’s legal team did a good job Settling and should have taken it to court and won on the facts.
Clear cooperation was always and is for the seller client’s benefit. The widest possible market exposure is the only thing that can ensure the seller getting the best terms.
There are always bad actors that will act in their own interest, or try to sway a seller into thinking a pocket listing serves them.
It doesn’t.
In almost every case, it can’t.
Ask if those that want clear cooperation to go away would also accept doing away with the NAR policy against “going behind the sign” to allow other realtors to give a different view?
Or require a seller to sign a full disclosure like they might when accepting dual agency.
Something to assure the seller’s true understanding of the cost of a pocket listing to their marketing effort.
I have been in the business for over 20 years and I’m afraid I must disagree. Too many times people want to throw the baby out with the bath water. While many times there needs to be adjusting to programs and policies, disbanding NAR is unnecessary. Realtors need to be regulated and we need a lobbying group to help Realtors and homeowners. We can’t abandon all the good NAR does because we don’t want to follow rules. It is those rules that make us a trusted profession. If you want to be looked at like a retail salesperson or a multi-level pyramid scheme worker; get rid of your National and State structures. Then no one will trust you. Keep NAR, State, and local boards, MLS, and get involved to make them better.
Our Board & MLS in Buffalo, NY have had, for a very long time a policy that the listing had to be submitted to the MLS in two business days after listing. We have a large, old Buffalo city broker that used to take “office listings” in certain neighborhoods in the city, not putting in the MLS, The reason was so the owner would not be marketed to a large area. Eliminating this rule, the agent, broker and the local board would be opening them up to the big bad days of the ’50’s and ’60’s. How many times have we sat across from a seller who said “I don’t want to sell to ……….” At that point we would have to educate them that we could not discriminate in any way, shape or form or thank them very much and take a walk. This would open up the agent saying, “well we do not have to put in the MLS, take an office listing where we have complete control.” Good luck, I enjoy not knowing much about the buyer except are they qualified to buy the home, period.
something to think about…there is no rule to protect the buyers from commission discrimination. now that the commission is not on the MLS it’s not public information. the seller can say I’m not paying a commission to one buyer that they don’t like for some reason. it’s all negotiable…. as they say in the big city.
Keep clear cooperation. Elimination of clear cooperation is only in the best interest of the broker not the seller. Most sellers do not understand clear cooperation and will agree to brokers suggestions.
NAR either needs to be abolished or re-organized into an organization that actually benefits REALTORS. In the forty plus years of real estate I have not received a single benefit from NAR. In fact it has forced agents to keep paying it’s dues by requiring MLS enrollment only to members of NAR. It’s policies are not good for agents, seller or buyers. The sole reason NAR was established was to protect commissions and restrain sellers choices on how they market their properties. In any other industry this would be a blatant case of unfair restraint of trade. I am personally in favor of a class action lawsuit that would force NAR to remove it’s membership requirements to agents. Agents could then pick and choose which organizations they want to be a part of, and force these organizations to be more competitive on providing services that are actually useful for agents, sellers and buyers. In fact I am going to stop paying my NAR dues and if they want to take me to court I will be glad to let a jury of my peers decide my fate.
24 hrs is Not an Unreasonable Time to Load a Listing. It Better Serves the Seller who has been Educated by their Realtor about the Benefits of the Widest Market for their Property.
If an Agent has a Ready,Willing and Able Buyer “Bring It On” in the 1st 24. Otherwise You Do the Seller a Disservice by Hiding that Property Away.
Educating the Seller is Why We’re in the Pickle with Commissions. Sellers felt They were Deceived and the NAR’s Legal Fools did a Lousy Job of Explaining Commissions have Always Been Negotiable. They Rolled on All of Us.
Johnson Stepping Down within 45 days Reinforces the Inept Council They Employed. 2 years of Frozen Fees will Bite us All in 3 years.
Very few Situations Exist where it’s in the Best Interest of the Seller to Hide their Listing Away.
I just Closed a Cash Deal with a Professional Sports Figure who only Knew about the Property from Heavy Marketing.
They Paid a Fair Price and Closed Quickly. It was a Co-Op deal. The Sellers Worked with Me, From a Referral.
The NAR has Continually Shot iItself in the Foot, but on Clear Cooperation they have a Point.
Maybe 48 hrs, or the Old 72 hrs is a Better Fit, as My MLS used to Enforce.
All the Above Comments are Valid and Thoughtful.
DJF more so in my Opinion.
Too bad some Agents Feel the Need to Hog Away a Listing that Better Serves the Seller, with More Exposure.
Real estate agents that want to get rid of CC are just greedy. They want to keep all of the commission and care less about what is best for their clients. What’s even worse is that some sellers don’t want to sell to people of that don’t ‘belong’ in their neighborhood. They want to return to the 1930’s and 1940’s when they could keep a pocket listing at the request of the seller to pick who they wanted to buy their home. Frankly, shame on them for their greed and unprofessionalism.