In a new letter, the discounter argues that new off-market listing bans from Bright MLS and the National Association of Realtors will negatively impact its ability to do business.

Just days after the National Association of Realtors (NAR) approved a controversial ban on pocket listings, discount franchisor Assist-2-Sell issued a letter criticizing the “relative hubris” of such policies and suggesting that they could lead to legal action from regulators.

The letter, dated Nov. 15 and addressed specifically to Mid-Atlantic multiple listing service Bright MLS, argues that bans on pocket listings are driven not by an interest in protecting consumers but rather by real estate agents and trade organizations who want to protect the “MLS systems from competition.”

The letter goes on to say that Assist-2-Sell is “surprised by the relative hubris which has been on display in connection with the enactment of these new MLS policies.”

“We will not be surprised if action is brought in the near future, either by regulatory agencies or others, seeking to enjoin these new policies,” the letter, which is signed by Assist-2-Sell general counsel Scott Gronek, states.

The letter is the latest exchange in a back-and-forth between Assist-2-Sell and Bright MLS, which debuted a new pocket and off-market listing rule in mid October. The rule gives Bright MLS’s nearly 100,000 members a day to put their properties into the multiple listing service system “following consumer marketing of any kind.”

After Bright MLS adopted its policy, both Assist-2-Sell and Compass strongly objected, with the latter firm threatening a lawsuit. However, Bright MLS refused to back down.

Bright MLS’s rule was closely modeled on an earlier proposal from NAR, officially dubbed the Clear Cooperation Policy, which was overwhelmingly approved last week at the organization’s gathering in San Francisco.

At issue with both policies is how agents should be allowed to market their listings. NAR and Bright MLS have both argued that the market, and consumers, are better served if all agents have access to all listings. Some real estate executives, such as Redfin’s Glenn Kelman, have also argued that requiring agents to share their listings with each other thwarts problems such as discrimination.

However, high-profile agents have countered that they don’t want to be “treated like children” when it comes to their marketing options.

Gary Gold, second from left, and and Mauricio Umansky, third from left, both criticized pocket listing bans last month at Inman Luxury Connect. Credit: AJ Canaria of PlanOmatic

Assist-2-Sell has further argued that banning off-market and pocket listings could disrupt its business model. The company provides homesellers a conventional sales approach, in which homes get posted in the local MLS, but also offers a “direct to buyer” program that markets homes “through media other than the MLS.” Assist-2-Sell believes the latter program will be disrupted by the pocket listing bans.

Though Assist-2-Sell’s letter last week was specifically addressed to Bright MLS, it expresses concern about the policies from both the multiple listing service and NAR — which it notes are “virtually identical.”

In addition to stating that the outcry over pocket listings appears to be coming “from MLS members themselves,” Assist-2-Sell’s new letter also argues that the new bans fly in the face of anti-trust regulations dating back to the 1970s and 1980s. The letter specifically cites a 1983 Federal Trade Commission report, which concluded that requiring MLS members to “submit all of their listings of a designated type restricts the competitive freedom of the broker-members.”

The letter further states that past policies allowed agents to publicly advertise “office exclusives,” or listings that agents opt not to enter into their respective MLSs. The new pocket listing bans still allow for office exclusives, but if those listings are marketed outside of agents’ brokerages they have to go into an MLS.

Assist-2-Sell argues that such a policy gets in the way of both agents’ and homeowners’ ability to “contract as they see fit” for the sale of a home. The letter additionally states that “we respectfully disagree with the view that these policies would have no impact on our business model” — a comment that is a direct response to Bright MLS’s assertion in its own letter last month.

However, in a statement to Inman Monday, Bright MLS disagreed with Assist-2-Sell’s claims. The statement notes that the new policy has been “enthusiastically accepted” by the local real estate community, and argues that “there simply is no way to squeeze this pro-competitive policy into creating an antitrust problem.”

“The antitrust laws are concerned with diminished competition that leads to increased consumer prices,” the statement continues. “Bright’s policy has the opposite outcome. The policy fosters more competition among brokers, rather than only among limited groups of brokers.”

The statement also argues that there are discount brokerages currently using Bright MLS, and that “if discount brokers already are offering low- or no-commission-split offers outside of Bright’s system, it seems disingenuous to assert that it would be somehow different if the same information is now entered into Bright’s system.”

NAR did not immediately respond to Inman’s request for comment on the matter Monday.

In any case, Assist-2-Sell’s new letter ultimately concludes by asking Bright MLS to either abandon its pocket ban altogether, or to change it so that MLS members can continue to market non-MLS listings — a change that would seemingly undercut the objective of the policy to begin with.

Read Assist-2-Sell’s full letter here:

Update: This post was updated after publication with comments from Bright MLS.

Email Jim Dalrymple II

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