Clear Cooperation Policy: Consumer Choice vs. Market Exposure

The National Association of REALTORS® (NAR) implemented the Clear Cooperation Policy (CCP) in May 2020, which mandates that listings be submitted to the Multiple Listing Service (MLS) within one business day of being publicly marketed. This policy, designed to ensure fairness and transparency, has sparked a heated debate within the real estate industry. Two influential voices in this discussion are Robert Reffkin, CEO of Compass, and James Dwiggins, CEO of NextHome. While Reffkin advocates for consumer choice and agent flexibility, Dwiggins argues that maximizing market exposure through the MLS is essential for ensuring sellers get the highest price for their homes. Recently Zillow also weighed on the side of Dwiggins calling out Fairhousing issues. Redfin's CEO also sided with Dwiggins while Anywhere's spokesperson called for changes to the policy.

Robert Reffkin, as the CEO of Compass, opposes the Clear Cooperation Policy, emphasizing the importance of consumer choice in how homes are marketed. He believes that before the CCP, agents had greater flexibility to act in the best interest of their clients, allowing them to tailor marketing strategies according to their client's unique needs without being restricted by MLS rules.

Reffkin argues that some sellers value privacy over broad exposure, and the CCP forces these clients to market their homes publicly even when they would prefer not to. He highlights situations where privacy is a priority, such as when sellers are dealing with personal issues like illness or divorce. In such cases, Reffkin asserts that the policy compromises the agent's ability to act in the client's best interest by mandating public marketing, which may not align with the seller's preferences.

Additionally, Reffkin challenges the assumption that more exposure always results in a higher price. He points out that many clients, including home builders, have successfully sold properties off the MLS, suggesting that not every seller believes maximum exposure is essential. Reffkin argues that consumer choice should take precedence, allowing sellers to decide how much exposure their property receives and how they want their home to be marketed.

James Dwiggins' Position: Maximizing Exposure for Better Outcomes

James Dwiggins, CEO of NextHome, presents a contrasting viewpoint. He defends the Clear Cooperation Policy, arguing that its purpose is to ensure that all listings receive maximum exposure, which he contends is crucial for sellers to achieve the best price for their homes. According to Dwiggins, the MLS system levels the playing field by making listings available to the entire marketplace, benefiting both consumers and the real estate industry as a whole.

Dwiggins stresses that before the CCP, large brokerages often held back listings for internal promotion, limiting the competition that benefits sellers. By keeping listings off the MLS, these firms reduced the pool of potential buyers, often leading to lower sale prices for homeowners. Dwiggins argues that market exposure through the MLS ensures that listings reach the widest possible audience, which creates a competitive environment and drives prices up.

While Reffkin advocates for consumer choice, Dwiggins emphasizes that most sellers—around 99%, by his estimate—want to maximize the value of their home. He highlights studies showing that homes sold off-MLS can lose anywhere from 5% to 17% of their potential value compared to homes listed on the MLS. For Dwiggins, the key to protecting consumers' financial interests lies in ensuring their property is seen by as many potential buyers as possible, rather than limiting exposure for the sake of privacy or exclusivity.

Dwiggins also warns of the legal and reputational risks of eliminating the CCP. He points to previous lawsuits filed by sellers who felt misled by agents into keeping their homes off the MLS, only to discover later that they could have received a better price by listing publicly. Without the CCP, Dwiggins argues, large brokerages would revert to promoting exclusive listings internally, hurting consumers and the industry's reputation in the long run.

Comparing Consumer Choice and Market Exposure

At the core of this debate is a fundamental difference in how Reffkin and Dwiggins view the best way to serve consumers. Reffkin prioritizes consumer choice, arguing that sellers should have the flexibility to decide how their homes are marketed. He believes that forcing all listings onto the MLS, as the CCP requires, limits a seller’s ability to manage personal and financial concerns on their own terms. In Reffkin’s view, the Clear Cooperation Policy reduces the options available to both sellers and agents, particularly for those who value discretion and privacy.

On the other hand, Dwiggins focuses on ensuring that consumers get the highest price for their homes through maximum market exposure. He believes the CCP prevents large brokerages from monopolizing listings for internal gain and protects consumers by ensuring their property is marketed to the largest possible audience. For Dwiggins, the CCP is essential to safeguarding sellers' financial outcomes, as broad exposure leads to more competition and higher offers. He sees the MLS as the most effective tool for creating a fair and transparent marketplace, and while he acknowledges the policy can be improved, Dwiggins insists that its core purpose—guaranteeing market access—must remain intact.

Conclusion: Consumer Choice vs. Market Exposure

The debate over the Clear Cooperation Policy ultimately comes down to a question of how best to serve consumers: Is it more important to prioritize consumer choice, or is maximizing market exposure the best way to protect homeowners’ financial interests?

Reffkin argues that sellers should have the freedom to choose how their home is marketed, particularly when privacy or personal concerns are at play. He views the CCP as a rigid policy that limits both sellers’ and agents’ ability to navigate complex situations in a flexible manner.

Dwiggins, in contrast, contends that the true benefit to consumers lies in giving their homes maximum exposure to the marketplace, ensuring they receive the highest possible price. He argues that the CCP protects sellers by preventing exclusive, off-MLS listings that often result in lower sales prices. For Dwiggins, market exposure is critical to safeguarding consumers' financial outcomes.

As the real estate industry continues to debate the future of the Clear Cooperation Policy, the central question remains: Should the industry prioritize consumer choice or market exposure? Both perspectives highlight important considerations, but the answer will ultimately shape the future of real estate transactions and the value sellers receive from their homes.