Clear Cooperation Controversy: What’s Really at Stake for Agents & Consumers

What exactly is going on with the CCP or Clear Cooperation Policy? By the way, CCP here, not the Chinese Communist Party. So if you're a regular person who watches my videos, stick with me because this matters to you. And if you're a real estate professional, you should already know this stuff, but stick with me for my opinion on what's happening right now. So let me give you the quick historic background. In real estate, we who are practitioners Most of us REALTORS®, but the non-REALTORS® in some markets have access to a database called the Multiple Listing Service or the MLS. What that amounts to is a very free and fair marketplace, not free as in cost, but free as in unfettered access. It is, I can tell you this, the envy of planet Earth. As a real estate instructor, I've had the chance to speak on 5 different continents and every time I'm in another country, The one thing that they wish they had from the US markets is our Multiple Listing Service because they crave the openness of the data. It also means that we have a system that doesn't discriminate. By that, I mean we have brokerages that are teeny tiny like mine. I'm small but mighty. And there are gigantic mega brokerages with hundreds and hundreds of agents. In the Multiple Listing Service, it doesn't matter the size of my brokerage. If a seller selects me, I can put their house into the system, and it will be seen by every paying member of the Multiple Listing Service. What also happens is because our Multiple Listing Service feeds all these data websites, the minute I put a house into the multiple, it syndicates out to hundreds of websites, meaning you the consumer, if you're buying a house, can see the total picture of the inventory. That's transparency. I believe it to be good. Now, in the history of the MLS's evolution, There have been some hiccups along the way about transparency and to make sure that we do have a very fair marketplace where agents can't boycott each other and brokerages can't cut each other out. Because at the end of the day, every real estate professional should be focused on the best interest of the consumer. So what's happening here lately? There was a rule change a few years ago called the Clear Cooperation Policy, What that policy amounts to is that if I, Leigh Thomas Brown, go over to 123 Elm Street and list Joe and Jane's house, the rule says that as a member of the multiple, I have to put that listing into the system. Each MLS has its own rules and timeframes and guidelines regarding that listing, but at the end of the day, it has to be available in the system. There are right now a lot of questions about that clear cooperation policy. There are brokerages that don't think they should be forced to put a listing into the system. They believe that they should be able to list Joe and Jane's house and keep it to themselves, not letting anybody have information or access unless it's inside their brokerage. To me, that's the attitude of scarcity, which says they have to cling tightly to everything they have. Now, the excuse that's given for why that's preferable to those brokerages is that there are some sellers that want privacy when their house is on the market. I agree, that probably happens, well, not very often. Let's be honest, we don't have that many celebrities out there who are just, oh, gonna faint dead away if some random person comes into their house. And I can say this as somebody in the Charlotte, North Carolina market where we do have a decent number of celebrities, certainly not West Coast LA numbers, but we have football stars and basketball stars and race car stars and rappers and all manner of famous people in town. And what I can tell you is that typically their houses are held in a trust anyway, or it's held in a name whereby there is already privacy. So if that house is listed, it's probably not going to be known as a celebrity house unless somebody develops a case of bigmouthitis on Snapchat, Instagram, or the TikToks. But that's the argument from these brokerages. Some sellers want privacy. They don't want every buyer to know about their house. And And in fact, the argument that they're giving against this Clear Cooperation policy is that there are sellers who do not want buyers to know about their house. Okay, for real? I don't know that I buy that argument because as a logical person, I know that when I work with my home sellers, one of the things they want is the widest possible buyer pool. Because in order to capture the most favorable offer, whether it's price, terms, or any combination of it, You want wide availability so you can find the right buyer because you don't know where the buyer is or who their agent is. That's the argument on the side of keeping the Clear Cooperation Policy in place, which says we need to make sure that all the data's in the system. Now, there's another reason to consider keeping the Clear Cooperation Policy in some format, and that is for the accuracy of our appraisal data. One thing many REALTORS® don't know is that the appraiser who goes out on behalf of the mortgage lender, if there's a mortgage or on behalf of the buyer, if they want an appraisal anyway, in a cash purchase, is that the appraiser is going to go to the MLS to pull the comparable sale data so they can provide an accurate opinion of value. If the MLS becomes a shell of itself and only has some properties, but the other ones are held in certain companies, it's going to become really hard for appraisers to evaluate and get the numbers right. And that really matters to the consumer public. So do appraisers want to give a number that makes the consumer happy? Well, they don't really care about the consumer's happiness. They care about the accuracy of the data and the defense that they can make for their opinion of value. I personally want my appraisers to have the best possible data set, and so do my buyers, and frankly, so do my sellers. They want to know they can depend on the number that's being derived by the appraiser. Now, there's another situation that has been designed as a workaround. And it's really just a smart way to do business. And that's the coming soon policy. Many of our home sellers love the coming soon period, because that means if Joe and Jane list their house with me, I can put the house into the multiple, and I can put a window on there, maybe 3 days or 7 days or what have you, to allow the market to know about their house prior to the showings beginning. That amounts to a limited marketing period where in-house I might have some buyers that get to know about it earlier because I told them. But the rule of the coming soon period is that nobody gets to go into the house until everybody gets to go into the house. I got to say that when I look at the arguments going on, there are two camps, and one of the camps says that the big brokerages should be able to hold back the listings just for themselves and force buyers to go to that agency. The other side says that's going to amount to a fracturing of the data and it's going to be unfair to buyers who choose a smaller agency or to sellers who choose a different agency as well. The Leigh Thomas Brown opinion on this is, as a real estate professional and someone who carries a license that was issued by the North Carolina Real Estate Commission and also a license that was issued by the South Carolina Real Estate Commission, My duty is to the public trust. My duty is to the consumers who choose me. And I believe that my buyers, when they select me, they should have access to the entire marketplace. They shouldn't be forced to choose me because I have access to listings. That doesn't make sense. We have a wildly competitive real estate market where the consumer has a zillion choices. You can pick high cost, low cost, high availability, low availability, friend, foe. Whatever you want, you can find in the real estate professional pool. I don't want buyers to feel restricted based on where the house has been listed. I just don't think that's right. I also think that sellers should have their house seen by the widest possible buyer pool so that they get the best possible offer for them, whether it's price or terms. That's up to the seller to decide. I just can't get my mind around the idea that any seller wants to have a restricted marketplace. That doesn't seem like somebody who wants to sell. I also don't think buyers want a restricted pool of houses. I've seen a lot of buyers in my 25 years who start off with this criteria list and then buy this house over here simply because they had access to everything in the market and were able to evolve what they wanted as they were looking. So as you look at this policy, first of all, ask yourself, who benefits if it stays? Who benefits if it goes? And if your answer falls on the benefit going to the consumer, I do believe that's where the policy should land.