Rebuttal to Robert Reffkin’s Argument Against NAR’s Clear Cooperation Policy (TLDR at end)

While Mr. Robert Reffkin is undoubtedly well-spoken, educated, and influential in the real estate industry, it’s important to recognize the inherent bias in his argument for repealing NAR's Clear Cooperation Policy. As the founder of a large brokerage with considerable financial resources and a private home listing service housed within its own platform, there are clear monopolistic advantages for Compass in bypassing MLS requirements. While Mr. Reffkin can't openly admit this—because it is precisely what many on the other side of the debate believe—the motives behind his position warrant skepticism.

Let’s not forget that we’ve seen this playbook before. Consider the recent launch of a flat-fee "tech" company created by the lead plaintiff in the very lawsuit against NAR, where they claimed harm by real estate brokerages. That same individual now co-opts agents nationwide to generate referral fees under the guise of a pseudo-brokerage. This strategic maneuvering raises serious questions about the true intentions behind attacks on industry standards like the Clear Cooperation Policy.

In response to Mr. Reffkin’s points, it’s essential to address several key aspects that his argument conveniently overlooks:

1. The Misinterpretation of the Clear Cooperation Policy’s Purpose

Reffkin frames the Clear Cooperation Policy as a restriction on agents and clients, but this oversimplifies its actual intent. The policy was enacted to prevent the misuse of off-market listings—practices that eroded transparency, consumer access, and competitive fairness among agents. By mandating that properties listed publicly must also be added to the MLS, the policy ensures that no agent or brokerage monopolizes buyer access or market information, benefiting not only the buyer pool but also the seller by providing broader visibility.

One critical aspect that Reffkin overlooks is the role of the MLS in price discovery. When a property is listed on the MLS, it is exposed to a wide pool of potential buyers, creating competitive bidding conditions. This competition helps establish the property’s true market value. While sellers may not always prioritize achieving the highest price—factors like privacy, timing, or other personal considerations may take precedence—the MLS still offers avenues for sellers who wish to keep their property off the public platform while maintaining the benefits of working with a licensed agent.

Sellers can opt for private listings or listings where the home is shown to a restricted set of buyers for a limited period, but they aren’t forced to surrender transparency. The MLS system across the country already provides such mechanisms, allowing sellers to make informed choices without sacrificing privacy or exclusivity. Importantly, the Clear Cooperation Policy doesn’t take away a seller’s autonomy; rather, it ensures that the majority of homes are marketed in ways that uphold fairness and transparency, all while safeguarding the seller’s right to make alternative choices if price discovery is not their primary goal.

Consider the Commercial Real Estate (CRE) market, which operates in a largely unregulated fashion. In CRE, insider relationships, back slaps, and favors often dictate who gets access to purchase or sale opportunities. While this may work for certain business transactions, it’s an unsuitable model for Residential Real Estate. Residential Real Estate must adhere to strict Fair Housing standards and avoid the systemic discrimination that has plagued the industry, such as the recent appraisal issues tied to race. The Clear Cooperation Policy ensures that everyone with a computer or phone has equal access to view and bid on properties, providing a more level playing field and avoiding the biases that off-market listings can enable.

A full MLS database accessible to all fosters competition and trust. This is not just good for buyers, but also essential for ensuring that sellers benefit from genuine market forces. Even when sellers prioritize privacy or speed over price, the MLS already provides solutions that cater to those needs—without resorting to exclusionary, off-market practices.

2. Larger Buyer Pool = Greater Potential Demand

Reffkin suggests that keeping listings off the MLS gives sellers more control over the sale, but this claim ignores the simple truth: more exposure equals more potential demand. By listing on the MLS, sellers tap into the widest possible pool of buyers, which creates competition and can drive up the final sales price.

While some sellers may not prioritize maximum price, there’s no denying that exposure matters. Limiting a listing to off-market channels shrinks the buyer pool and may reduce a seller’s leverage when negotiating. Off-market listings also contribute to pocket listings, which often cater to an exclusive group of buyers and limit fair access to housing opportunities, further exacerbating inequality in the market.

3. Ethical Responsibility: Serving All Clients Equally

Reffkin’s assertion that off-market listings protect clients’ privacy conveniently overlooks a larger ethical responsibility: fair housing and equal access to inventory. The Clear Cooperation Policy prevents “pocket listings” from creating an exclusive market where only a select few buyers have access to available homes. By using the MLS, agents not only ensure that more buyers have access to homes, but they also foster healthy price discovery through broader market exposure.

A well-functioning real estate marketplace relies on transparency and availability. When all listings are accessible through the MLS, buyers don’t have to navigate a fragmented system, reaching out to multiple agencies or brokerages to see what’s available. This efficiency benefits consumers, preventing a scenario where inventory is siloed within private platforms. Without the Clear Cooperation Policy, buyers might be forced to sign buyer-broker agreements with individual agencies, tying themselves to a particular brokerage and limiting their ability to explore the full range of available homes. This, in turn, restricts buyer choice and risks undermining long-term competition in the marketplace.

It’s worth considering the implications of this shift. While Reffkin’s argument may appear to champion client interests, a more fragmented system could inadvertently result in buyers and sellers becoming increasingly locked into specific ecosystems, limiting their flexibility. Over time, this dynamic could reduce competition, as large brokerages amass exclusive control over sections of the market. Although this may not be the explicit intention of Reffkin’s argument, it’s hard to ignore that such an outcome would benefit well-funded, vertically integrated brokerages, like Compass, at the expense of broader market competition.

If left unchecked, this trend could lead to a diminished marketplace where competition is stifled, and consumers are left with fewer options. And by the time any regulatory corrections are made, through agencies like the DOJ or FTC, the damage to market dynamics may already be severe. This isn’t about just one company; it’s about the risk of setting a precedent that moves us away from a transparent, competitive marketplace and toward a more controlled, exclusive one.

4. Homebuilders and Privacy: Different Dynamics

Reffkin draws an analogy between how homebuilders sell homes and how Realtors should handle listings, but this comparison is fundamentally flawed. Homebuilders operate with a completely different set of incentives and dynamics. They control their own marketing and distribution channels, which are distinct from traditional real estate sales. Builders are in the business of selling homes directly through their own sales teams, often prioritizing their bottom line above all else—not engaging in a cooperative marketplace aimed at transparency or fair competition.

The fiduciary responsibilities of Realtors, by contrast, bind them to protect their clients' interests, ensuring open competition and access to the broadest possible buyer pool. The MLS is the platform that makes this transparency possible. Realtors have a legal and ethical duty to represent their clients fairly, creating opportunities for all potential buyers to participate, which ultimately benefits the seller through greater exposure and competition.

Moreover, homebuilders have no such obligation to look out for the best interests of the buyer. Their primary responsibility is to their shareholders and maintaining profitability. We’ve seen this time and again in the industry, where Realtors routinely market to the public about the risks of purchasing directly from builders without representation. The difference is stark: a Realtor’s duty is to protect their client, while a builder’s duty is to sell homes, often by maximizing profits through in-house financing, upgrades, and other profit channels that may not always align with the buyer's best interests.

While homebuilders do occasionally work with Realtors, particularly when they need to move problem properties or increase exposure for less visible or "secret" communities, it’s telling where they turn when they need to market these homes effectively: the MLS. The very platform that Reffkin criticizes for limiting client privacy is the same one builders rely on when they need to reach a broader audience. This underscores the fact that even in highly controlled builder environments, the MLS remains a critical tool for price discovery, competitive exposure, and reaching potential buyers—especially when the builder’s usual channels fall short.

In contrast, builders typically reserve the MLS for homes that are harder to sell, communities that need more visibility, or when they’re ready to reach beyond their established marketing network. This selective use highlights the essential role that the MLS plays in maximizing a property's exposure—even builders, who have their own systems in place, recognize the value of the MLS when traditional methods fail.

Reffkin’s analogy attempts to equate two very different dynamics. Homebuilders have their own agendas, which don’t align with the duties and ethical responsibilities Realtors have toward their clients. When builders need broader market exposure or help with moving unsold inventory, they ultimately turn to the MLS, proving its value even in cases where other marketing strategies are available.

5. The Importance of Transparency and Safeguarding Market Integrity

Reffkin’s critique overlooks the broader, long-term consequences of eroding transparency in the real estate market. The Clear Cooperation Policy isn’t just about individual transactions—it’s about maintaining public trust and ensuring the overall health and integrity of the market. When buyers, sellers, and agents know they’re operating within a transparent system where all qualified buyers have fair access to listings, it strengthens the foundation of the real estate ecosystem and upholds fair housing principles.

A transparent marketplace promotes not only fairness but also stability. When market integrity is compromised—through off-market listings, exclusivity, or fragmented access—the potential for manipulation and reduced competition grows. Over time, this can undermine public confidence, lead to distorted market pricing, and erode the benefits that transparency provides to both buyers and sellers, particularly those who have been historically marginalized in the housing market.

The Clear Cooperation Policy plays a critical role in protecting this integrity. By ensuring that listings are widely available and visible, the policy helps preserve the competitive and transparent marketplace that Realtors, clients, and regulators have worked so hard to build. Without these safeguards, we risk a future where private listing systems and exclusive ecosystems like the one Reffkin promotes diminish competition, weaken the industry as a whole, and ultimately hurt the consumer—especially in terms of reduced fair housing opportunities, limited choice, higher costs, and less market access.

6. Client Education: Empowering Sellers with the Facts

One area where Reffkin might have a valid point is around informed consent. Transparency is key to ensuring that clients fully understand their options. However, rather than dismantling the Clear Cooperation Policy, the focus should be on educating clients about the trade-offs involved with off-MLS listings. Realtors can provide clear and transparent communication to help sellers make informed decisions with a full understanding of the pros and cons of each strategy.

We don’t need to remove or weaken the Clear Cooperation Policy to achieve this. In fact, the recent NAR settlement regarding real estate commissions highlighted the need for greater transparency to consumers—specifically through verbal and written disclosures—so they are fully aware of how commissions work. One of the key solutions to that issue, as put forth by the plaintiff, was to make sure that Realtors were upfront and clear with their clients. The same logic applies here: if clients are informed about the potential trade-offs of choosing an off-MLS listing versus listing on the MLS, they can make empowered, transparent decisions.

Drawing a correlation between these two cases, it’s not coincidental that the Clear Cooperation Policy is now under attack. After a settlement that emphasized transparency as the solution, it seems almost too convenient to now be calling for the removal of a policy that promotes transparency in the marketplace. If the goal is to ensure clients have full agency and understanding, then educating them with transparent information about how MLS listing versus off-market strategies will impact their sale is the most responsible solution—not weakening the structure that underpins fairness and market integrity.

Ultimately, empowering sellers with all the facts—whether through verbal discussions, written disclosures, or clear comparisons—ensures that clients can weigh the benefits and drawbacks of each approach and make the decision that’s right for them. The Clear Cooperation Policy, with proper client education, can coexist with a seller's right to privacy or an off-market sale, but it should not be dismantled in favor of opaque and potentially anti-competitive practices.

Conclusion: Defending the Clear Cooperation Policy

The Clear Cooperation Policy was created to preserve market integrity, transparency, and fair competition—values that benefit not only industry participants but also buyers and sellers. While Mr. Reffkin’s argument may seem persuasive at first, it fails to address the broader consequences of dismantling a policy that ensures equal access to opportunities and supports a healthy, competitive market.

In an era where transparency and fair housing are essential, Realtors must uphold their duty to protect their clients and the public interest. Removing the Clear Cooperation Policy risks driving the market toward fragmentation, exclusivity, and reduced competition. This shift would harm not just agents, but also buyers and sellers by limiting their choices and weakening consumer trust in the real estate ecosystem.

The real solution lies in client education and clear communication, not in undermining transparency. By empowering sellers with all the facts, we can uphold the ethical standards that make the real estate market strong and fair for all participants. Reffkin’s vision may serve the interests of a select few, but the Clear Cooperation Policy benefits the entire industry, ensuring that everyone—agents, buyers, and sellers alike—has access to a fair and open marketplace.

TL;DR

Robert Reffkin’s call to repeal NAR’s Clear Cooperation Policy overlooks its key benefits of market transparency, fairness, and competition. The policy ensures that properties listed publicly are available to all buyers through the MLS, preventing exclusivity and promoting healthy price discovery. While Reffkin claims that off-MLS listings protect client privacy, this approach limits buyer access and reduces competition, hurting both buyers and sellers in the long run.

The Clear Cooperation Policy fosters fair housing, providing equal opportunity for all buyers to view and bid on homes. Rather than dismantling the policy, the focus should be on educating clients about the pros and cons of MLS listings, empowering them to make informed decisions. In the end, the policy benefits the entire industry—agents, buyers, and sellers alike—by ensuring a fair, transparent, and competitive marketplace.

https://www.inman.com/2024/09/20/compass-ceo-reffkin-nars-clear-cooperation-violates-code-of-ethics/