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Against the backdrop of an ongoing feud between Compass and Northwest Multiple Listing Service, a group identifying as clients of the brokerage have taken the first steps toward an apparent class action lawsuit against the MLS.
The possibility of litigation was raised over the weekend on a website called Washington Homeowner Rights. The site asks homeowners if they’ve sold a property in Washington and experienced “a price drop or significant days on market,” or if they were “forced to compromise your privacy or security just to get your home sold.”
If so, the site suggests, such homesellers “may be owed significant compensation.”
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The site goes on to solicit contact information from potentially impacted homeowners. And it hints at future class-action litigation, noting that “we are helping our clients coordinate across a group of injured homesellers and helping the group secure counsel to bring legal action against NWMLS and its Board and to pursue full recovery for lost home value.”
The site does not provide details on who is involved, saying merely that “homeowners who are clients of Compass and sold homes in Washington State — representing nearly $100 million in residential sales — believe they were damaged by the current rules and practices of NWMLS.”
Inman received a tip about the website over the weekend and has reached out to the email address provided for potential class members, as well as to NWMLS and Compass. NWMLS did not immediately respond to Inman’s request Monday, though CEO Justin Haag authored an Inman opinion piece echoing comments he made over the weekend.
In a statement to Inman Monday, Compass said, “we’re proud to support Washington homeowners who are asking the right question: Why are they the only ones in America without a choice in how they sell their homes?”
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“The NWMLS system wasn’t built to serve homeowners — it was built to preserve the power of the NWMLS,” the statement continued. “We’re standing with homeowners who want something simple: the right to decide how their home is sold.”
The website comes as Compass and NWMLS spar online over private listings. The dustup began just over a week ago, when Compass CEO Robert Reffkin called out the Washington-based multiple listing service in a series of Instagram posts. Reffkin’s complaints included that NWMLS has prevented Compass from deploying its Private Exclusives — or, listings only available via Compass’ platform — in the state. Reffkin argued that NWMLS is the “the ONLY MLS in the country” to have done so.
On Friday, NWMLS fired back, arguing that private listings are exclusionary. The MLS also said that brokerages pushing for private listings are not doing so “for the benefit of sellers or buyers, but are instead designed to benefit those brokerage firms by entrenching them as the gatekeepers of property listings.”
Reffkin’s Instagram comments were specifically focused on NWMLS and the organization’s rules, but they arrived amid a larger industry battle over Clear Cooperation. Clear Cooperation is a National Association of Realtors’ rule requiring agents to put their listings into their NAR-affiliated MLS within 24 hours of beginning marketing. Last week, NAR opted to keep Clear Cooperation while also creating a carve out to delay listings’ syndication to consumer portals.
In the months leading up to NAR’s decision, Reffkin argued that Clear Cooperation infringed on sellers’ right to market their homes as they see fit. He also said, among other things, that forcing listings into an MLS burdens them with “negative insights” such as price drops. The debate about Clear Cooperation elicited heated commentary from both critics and advocates of the rule, and became one of real estate’s defining issues over the last year.
In his opinion piece, Haag criticized NAR’s move on Clear Cooperation, describing it as “exclusionary” and saying the trade organization is “misguided.”
NWMLS is broker-owned and thus not bound by NAR rules such as Clear Cooperation, though it does have its own policies that similarly require members to put their listings into the MLS.
The Washington Homeowner Rights website makes arguments akin to those Reffkin has articulated about Clear Cooperation generally, and NWMLS specifically. The website states, for example, that NWMLS “enforces the most restrictive listing rules in the country to maintain a stranglehold on the market.” And the website argues that the “rules mean sellers have no choice but to fully expose their listing immediately — leading to longer days on market and price reductions that may hurt their bottom line.”
“In every other state, homeowners have the freedom to explore alternative off-MLS marketing strategies that protect value, privacy, and flexibility,” the site states. “In Washington, that freedom doesn’t exist — and sellers are paying the price.”
