On Monday, Inman reported that Compass International Holdings has a new policy restricting its salaried employees from serving in Realtor association leadership. That includes brokerage managers.
According to the report, people were directed to step down from roles at local and state associations.
Let me be fair first, because fair is how you earn the right to be blunt.
On its own, I get it. At last count, nine MLSs are in court against Compass. Many MLSs are owned by Realtor associations. If my company were in that many courtrooms, my lawyers wouldn’t want my employees sitting on boards across the table either. So no, I’m not going to tell you this is some evil plot.
But I’ve been in this business more than 40 years. I’ve learned to watch the pattern, not the press release.
3 steps back from the table
Step 1: The listings. On the company’s third-quarter earnings call on Nov. 5, CEO Robert Reffkin gave investors some numbers. In cities where Compass faces no industry marketing restrictions, 63 percent of new Compass-brand listings now launch with its three-phase marketing plan.
In some cities, it topped 70 percent. Agents new to the platform added four times as many “See It First” listings in October as they did in July. Reffkin said that once the restrictions he considers artificial are gone, a good majority of listings would start as a private exclusive or a coming soon.
He also said Compass sites now show 89,000 homes you can’t see and/or show through the open MLS system. When you take the 89,000 homes and a “good majority” of Compass International Holdings will have sellers choose for limited exposure, that certainly does not sound like “sellers’ choice” but “Compass choice.”
Step 2: The data. In September, Compass sent letters to MLSs asking them to keep its agent and listing data out of the feeds that go to recruiting technology companies.
Step 3: The people. That’s Monday’s news: removing people from NAR committees.
Each step has a reasonable explanation. Put them side by side, and you see something else. The largest brokerage in the country (Compass, Century 21, ERA, Coldwell Banker, etc.) is stepping back from the shared table, one chair at a time.
The Houston story
The most telling moment on that earnings call wasn’t a number. It was a story.
Reffkin described a Compass agent in Houston whose client wanted to move to Dallas. In his words, “That agent doesn’t have the ability to search the MLS in Dallas.” So the agent searched the company’s own platform for off-market listings in Dallas and sent them to the client. The client made an offer.
One agent was with Sotheby’s International Realty (a Compass-owned brand), the other with Compass. He told investors that the deal doesn’t happen without the Compass platform.
Now, a point of clarification. Why did the agent think they didn’t have the ability to search MLS listings in Dallas from Houston? Houston agents can see Dallas listings. The two MLSs have shared them since last year. Perhaps that agent needs better training to understand how real estate works in their area.
That now opens a much bigger question. As Reffkin told it, the agent searched the company platform and sent the client its off-market Dallas listings. What about the thousands of other Dallas homes for sale on the MLS? Obviously, this agent only showed Compass listings.
Do you see a problem here?
If I were that buyer and found out later, I’d be furious. A buyer’s agent owes the client the whole market, not one company’s shelf. That’s what fiduciary means.
And notice how the story was told. A company platform did the job the MLS is supposed to do, for its own family of brands, and it was presented to investors as a win. He also walked investors through the listing pitch.
List with a Compass-family agent, and your home lands in front of every agent on the platform and the 225 million contacts in its system. As a pitch for one company, that’s smart. He’s doing his job, and doing it well.
As a model for a whole industry, Compass and its other brands are building their own island; they are becoming the largest company FSBO in the industry.
Cooperating brokers, not competing brokers
The American way of selling homes is the envy of the world for one reason. We compete for the listing, and then we cooperate on the sale. That only works if there’s a room where everybody sits down together.
I’m no defender of every rule that comes out of those rooms. I’ve been against the Clear Cooperation Policy for years. It’s that policy that gave birth to the company FSBO. But you change bad rules by showing up and arguing. That’s not what Compass International is doing. They are breaking away from the industry and forming their own.
And to the National Association of Realtors: A polite statement that everyone is welcome isn’t an answer. When the biggest brokerage in America decides its managers are better off outside your leadership, ask why. Out loud.
What this means for you
If you’re an agent at a Compass-family brand: The reporting says this policy covers salaried employees. You’re an independent contractor. Nothing reported so far says you can’t serve. Your seat just got more important, not less.
At the listing table: Nothing changes. It’s the seller’s choice. If a seller asks about a private or pre-market launch, start with the real benefits. More privacy. Less traffic through the house. One cook in the kitchen.
Then be honest about the trade-off. Fewer buyers seeing the home could mean a lower price, and the seller gets to weigh that. And if the home truly isn’t ready to show, coming soon is exactly what it was built for.
And show up. Volunteer. Run for something. An empty chair gets filled by whoever bothers to sit in it.
The views and opinions expressed here are those of the contributor and separate from the Inman newsroom.
Darryl Davis is the CEO of Darryl Davis Seminars. Get connected on Facebook or YouTube.
