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Right now, we are in a war of misinformation versus facts. Today, the policy behind Clear Cooperation is being picked apart by large real estate companies with huge market share and eager attorneys threatening litigation.
Michael Ketchmark, the attorney in the Sitzer | Burnett case, which brought about the National Association of Realtors settlement, openly pressured the real estate community to make Clear Cooperation go away — or else. I have to believe that Ketchmark’s intentions — however misguided — come from a good place, but dismantling Clear Cooperation entirely will have a profound ripple effect on the industry — and not in a good way.
Once upon a time in real estate, we had the Wild West when it came to listings. This meant agents represented a seller in selling their home, yet they were incentivized to guard the information. There was no transparency and very little motivation to cooperate. It was an abysmal way to work and hardly advantageous to clients.
Let’s be clear: Sellers have the choice to transact however they want, whether it’s on the MLS or off-market. They don’t even have to use an agent. This is how free markets work.
What supporters like me are saying is that co-brokering and Clear Cooperation were put in place to help sellers get maximum exposure for their homes while showcasing to buyers everywhere what inventory is available. Free, fair, transparent and a level playing field.
Fundamentally, at its core, co-brokering has created the absolute best environment for professionals to work together, and we’ve had to learn the hard way. More than 20 years ago in Brooklyn, there was no co-brokering, which created a nightmare for buyers, sellers and real estate professionals. Do we really want to go back to a time when buyers had to visit multiple sources to cobble together information?
Imagine you are selling your home. Unless you have a very compelling reason for discretion, you want maximum exposure to get the maximum price. However, if an agent does not share the listing with everyone, it opens the door to all sorts of bad behavior, including discriminatory practices like steering and brokerages trying to double-end deals to maximize commissions.
Let’s dress rehearse the tragedy of what would be if we eliminate Clear Cooperation in its totality: The consumer will have to scour various websites in the hopes of landing on the right page where they can find the home of their dreams. They might be forced to work with an agent or agency to see certain inventory that would have otherwise been publicly available.
Making it harder for the consumer is not what real estate agents are hired to do. Where is the value in that?
Large companies will take advantage of this to usurp power, monopolize markets and trample the smaller brokerages. We are already living in a very thirsty environment for inventory, and completely eliminating Clear Cooperation will shackle everyone further.
I am all for amending pieces of any policy if they improve processes and outcomes, but the spirit behind how Clear Cooperation works is paramount to everything agents do — putting their clients’ interests first. To paraphrase Warren Buffet’s famous quote, a healthy market is there to serve, not instruct.
Real estate is a service industry, and we need to step up and do what’s right for buyers, sellers and agents alike.
Bess Freedman is the CEO of Brown Harris Stevens in New York City.
