For months, Compass has been touting a Private Exclusive Network as part of a three-stage marketing strategy for homesellers, and while it sounds great in marketing jargon, its core purpose is much more dubious. Private Exclusives are a way for Compass agents to grab both ends of a transaction away from the public market. At worst, it hurts sellers by delaying their homes hitting the open market in front of a global buyer pool, and it’s also a detriment to buyers by contributing to the national inventory crunch.
Hoarding inventory from the MLS, other brokerages, and qualified buyers benefits only one entity in this scenario–and that’s Compass.
I get that I am the CEO of a competing brokerage, and perhaps one could say this is a biased narrative, but this is much bigger than me or Brown Harris Stevens. This is about upholding the fundamental tenets of brokerage. This is about putting our clients above our wallets and not exploiting this moment in time when the brokerage industry has taken so many hits to its reputation. Now, one of our fellow brokerages is looking to end NAR’s Clear Cooperation not because of some incredible act of altruism, but because it would help show financial growth during one of the hardest economic periods for housing in recent history.
Let’s be clear: sellers always have the choice to market their home off the MLS. There is no forced commitment to transact on the open market, but for the sake of transparency for the brokerage and consumer communities, the MLS associations do have guidelines should a seller choose to list on the open market. And there is no shortage of reasons why the public market is beneficial: it exposes homes to a wide global audience, it shows buyers what inventory is out there, it helps dictate fair pricing, it combats discriminatory practices, and it allows both buyer and seller a true picture of what a home is worth. Creating a closed marketplace in the shadows is antithetical to everything that real estate brokerage stands for.
In a recent earnings call, Compass CEO Robert Reffkin said that NAR’s rules only help to prop up inexperienced agents and smaller brokerages. Considering all big agents start out somewhere, and there was a time when Compass was not the behemoth VC-backed brokerage that it is today, I am truly shocked by such demeaning statements. The market is not there to serve Compass’ perpetual ascent into profit; it’s there to help buyers, sellers, and renters get the expertise they need and deserve.
I cannot stress enough that private listings are nothing new, but they should not be a go-to marketing strategy to the detriment of the real estate industry and our clients. Compass claims that Private Exclusives help agents test the waters without accruing Days on Market. Why, then, is Compass one of the only brokerages to display a Days on Market count if they claim it’s such a deterrent? This runs counter to their own talking points!
I am sounding the alarm because I think Private Exclusive Networks are dangerous for the future of our industry. Brown Harris Stevens co-brokes with everyone, Compass included. We will continue to do what’s best for our buyers and sellers, which 9 out of 10 times means listing on the open market, negotiating and drawing on our knowledge and connections as we have done for more than 150 years.
