Over the past year, MLSs across the country have received several letters from Compass International Holdings with a variety of demands. However, during a presentation at the Council of MLS’s Open House conference, where HousingWire is reporting from the event, Compass CEO Robert Reffkin said all he and his company are asking for is the ability to publicly market office exclusives.
“Compass wants a world where the only person that tells an agent how to market a home is the seller and the law. And the MLS is not the law,” Reffkin told attendees of the Council of MLS’s (CMLS) Open House conference on Wednesday afternoon. “After two and a half years of trying to work with MLSs and of playing whack a mole with MLSs that are changing their rules and their forms, it has become clear to me that the only way agents will be able to follow their clients’ lawful marketing plans is if the MLSs get out of the business of controlling how agents and homeowners market the properties.”
MLSs that don’t give into this demand, according to Reffkin, will soon be facing antitrust claims from his firm as well as some potential class action lawsuits from attorneys like commission lawsuit plaintiffs’ attorney Michael Ketchmark.Â
“We are prepared to sue any MLS that fines or punishes agents for publicly marketing office exclusives,” Reffkin said. “This will be an antitrust lawsuit where, when we win, the MLS will pay our legal fees and three times damages. For any MLS that forces us to sue, that MLS won’t be able to say that they are protecting fair housing and transparency because they will be defending a rule that solely prevents us from publicly marking and office exclusives.”
Reffkin added that Compass will not settle these lawsuits. According to Reffkin, Compass is willing to pursue litigation like this because he feels the MLSs are too slow to respond to his demands and that the actions they take are always to protect Compass’s competitors.Â
“It is not our job to go to the MLS every time an agent or a home seller comes to us with a great, new lawful idea on how to market a home and then go through years of MLS policy making debates where an MLS board consisting solely of our direct competitors decides how we can and cannot compete,” Reffkin said. “The MLS board is restraining competition and restraining new competitive ideas on how to provide marketing offerings for home sellers.”
Unreasonable demands?
In addition, Reffkin said he does not feel that what he is asking for is unreasonable.Â
“There is not a single thing that I advocate for that the MLS did not allow for over 50 years. For over 50 years, the job of the MLS was just this book,” Reffkin said holding up a vintage MLS listing book. “Agent-to-agent, brokerage-to-brokerage cooperation. For over 50 years, the MLS didn’t force us to give our clients’ data to companies like portals. For over 50 years, you would let us publicly market office exclusives.”Â
Reffkin also highlighted two points on the National Association of Realtors’ (NAR) 14 Point Antitrust Policy, which was created in 1971 as the result of an investigation by the Federal Trade Commission (FTC). These two points include that the MLS “shall not make any rule regulating the advertising or promotion of any listings” and that the MLS shall not “prohibit or discourage a member for accepting a listing from a seller preferring to” market the listing as an office exclusive.Â
This, in Reffkin’s view, has changed with the MLSs being allowed to create rules surrounding how a property is marketed and with NAR changing the definition of an office exclusive to a listing that a seller does not want publicly marketed.Â
“Right now, if a homeowner wants to publicly market their home, we are forcing them to put their homes in the MLS and that eliminates homeowner choice,” Reffkin said. “We will only really know if the MLS provides value if homeowners have the freedom to choose.”Â
The end of litigation
According to Reffkin, the litigation will end when MLSs stop fining or punishing agents for “following their sellers’ lawful instructions and allowing us to publicly market office exclusives.”
“We see only two paths. And both paths will allow us to publicly market off-exclusives. The first path is the very easy path: MLSs allow agents to publicly market off-exclusives which will end MLS control over how sellers market their homes,” Reffkin said.
If the MLSs do this, Reffkin said, Compass will work with them to “help the MLS to succeed.”Â
“You do not have to fine and force agents to market through you like you do now. They will run to you to give you data and buy memberships. You provide a lot of value, and you have a huge head start in being the best marketplace and marketing syndication option,” Reffkin said.Â
The MLSs that don’t change of their own volition, Reffkin said, will be facing litigation from Compass.
“For the MLS that won’t let us publicly market office exclusives, we will start suing in mid-October. The MLS will have to get out of marketing listings and pay their millions of dollars in legal fees and triple damages,” Reffkin said, adding that as the enforcer of rules thanks to NAR’s policy change last November, MLSs are also facing greater liability and risk of class action litigation.”
Reffkin said MLSs have until October 6 to give into his demands before they could face a lawsuit.Â
“Any MLS that agrees in the next week to the changes in the letter we sent, we will agree to release all of our claims and give them a data feed of all our office exclusives,” Reffkin said, claiming that this will leave those MLSs in a “better financial position and a better data position.”
Despite his antagonistic rhetoric, Reffkin said he values the MLS “more than you know,” as he sees the MLS as the infrastructure that could foster cooperation amongst brokers while protecting listings data from AI and technology vendors simply looking to extract value from the data supplied by the brokerages.Â
“If you have participant only or member only networks, you are going to grow and agents are going to want to give you their listings,” Reffkin said.
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