Published May 12, 2025
Assault on Clear Cooperation, Part 2
Assault on Clear Cooperation, Part 2
BATTLE LINES FOR THE NATIONAL BROKERAGES
As I ended Part 1 of this series, third party aggregator sites like Zillow and Homes.com, as well as several national brokerages, had drawn battle lines around the National Association of Realtors’ Clear Cooperation Policy. Many of the brokerages created their own off-market listing networks, testing the waters to determine how to work within the confines of the policy. They did this with two primary strategies:
- If a listing must be in the Multiple Listing Service (MLS) prior to marketing to anyone outside the brokerage, the brokerage needs to convince their agents and sellers that off-market listings are in the best interests of their sellers and result in higher prices.
- These brokerages also need to convince buyers that the only way they would get access to properties before they hit the market is by working with the brokerage. As a result, buyers would face less competition, and they would be able to purchase properties at lower prices.
Does anyone else see a fundamental flaw in this logic? It sounds like playing both sides off the middle.
The only thing that could stand in the way of this self-serving business plan is actual rational thinking and clear data to the contrary. Even though that data exists, it has been ignored by most of the real estate community, NAR and the public at large.
THE REAL IMPACT OF OFF- VS. ON-MARKET SALES
Bright MLS is an enormous organization that covers a huge swatch of real estate on the East Coast. Their Chief Economist, Lisa Sturtevant, PhD, published a fascinating study in August 2023, and updated it in April 2025, comparing the results of off-MLS versus on-MLS sales.
I have a lot of respect for Dr. Sturtevant, and it was clearly a well-run study. It leveraged 1.5M datapoints over a 4-year period and eliminated transactions like contractor flips, intra-family sales, foreclosures and the like. What’s more, the questions were simple and elegant, and came from a point of curiosity, not judgement. Here are two key takeaways:
- When a property is publicly available by being listed on the MLS, is the sales price affected?
Answer: YES
The original study showed that on-MLS homes sold for 17.5% more than off-MLS homes. In our market area, that means a median-priced home sold on the MLS in 2022 sold for $53,890 more than an off-market listing.
What’s more, 66% of homes originally listed off-MLS (as “Company Exclusives”) were eventually listed on the MLS. And this trend accelerated to 90% in the 2025 study update.
Why were the stats so in favor of on-market listings? Because buyers had:
-
-
- Unfiltered access to all properties on the market.
- The flexibility to pursue properties with the representation of their choice.
- And fair housing concerns regarding the limited access to information were essentially eliminated.
-
In addition, sellers benefited because their listings had exposure to the greatest number of buyers with potential interest in their property.
Did sellers lose money as a result? Impossible to say without data, but probably. I have very strong feelings about this. Did sellers lose time wasted on “Office Exclusives?” There is no question. And, as the old saying goes, time is money.
- In a strong seller’s market, are listings more likely to be a For Sale By Owner (FSBO)?
Answer: No
In 2017, the number of FSBO properties was 15% of total listings. In Q1 of 2023, this dropped to 7%, the lowest in history.
CONCLUSION
Considering the data, I think it’s clear that common sense should prevail here:
- The greater market exposure a seller’s home receives, the greater the likelihood of a sale at the best possible price.
- The greater market exposure, the less likelihood that some buyers are excluded from the market. That sounds like fair housing to me.
- Up to 90% of homes listed on private listing networks had to go on the MLS to get sold.
Unfortunately, logic and clear evidence do not always prevail. In our next post, I will go over the marketing strategies of the mega-brokerages and the 3 distinct audiences those strategies address: their agent community, the public, and their investors, who actually own the brokerages. As you will see, life is tough, confusing and convoluted when you serve many masters.
Thank you for reading and see you next time.
