Compass Founder and CEO Robert Reffkin continues to hold his stance against NAR’s Clear Cooperation policy, and reported that the company has seen no “meaningful change” in business since NAR’s practice changes went into place.
In the company’s recent earnings call for Q3 2024, Reffkin stated that the company had trained over 90% of its agents well in advance of the August 17 deadline for the practice changes, and that since the date, there has been no big business changes and that commissions are “still in line with historical internal averages.”
“Anecdotally, we are hearing things at both ends of the spectrum, but we’re hearing a number of top agents, for example, saying that they’re now charging a stronger commission rate more in their favor since they are now able to negotiate for themselves,” he continued.
The company has continued to see success amidst market challenges. In its latest earnings report, Compass saw a Q3 revenue of $1.5 billion, a slight decrease from last quarter’s $1.7 billion, but up 11.7% year-over-year. In addition, transactions grew 16.1%, which is a stark contrast to the 1.9% decline for the residential industry NAR reported. Compass also saw a net loss of $1.7 million, well improved from the net loss of $39.4 million seen in Q3 2023.
In terms of Clear Cooperation, Reffkin has been consistently outspoken against the policy as of late, commenting on it both last earnings season and at RISMedia’s CEO & Leadership exchange in September. He also claimed that many MLSs are already pulling back from the policy.
When questioned on his stance, Reffkin explained that if his agents were for the policy he wouldn’t be so staunchly against it, but that’s not the case.
“Look, if agents and homeowners wanted to be forced to put their listings on MLS in one day, I wouldn’t be against Clear Cooperation,” he said. “Agents are my clients. I work for them, not the other way around. And they are infuriated across the country for being fined $5,000 for doing what their clients say to keep a listing off the MLS for more than one day and still have public marketing.”
Reffkin said that “it is almost laughable, the amount of IP that has been stripped away from agents over the years” from a policy like Clear Cooperation. “No agent can even put a watermark on their listing on their photo.” He noted this is the “only industry” where people don’t own their own assets.
Reffkin and Compass executives expressed that regardless of what NAR decides, there are two reasons why they feel the policy’s restrictions on public marketing will eventually end:
“First, MLSs that represent about one-third of our markets have eliminated or no longer enforce off-MLS public marketing restrictions imposed by Clear Cooperation. We expect this trend to continue as more and more MLSs respond to continued pressure to remove or amend the rule. Second, if not removed by NAR, we believe Clear Cooperation will be removed through the courts. Legal pressure continues to mount on private party litigation.”
Reffkin also feels that a removal of Clear Cooperation will help Compass’ business. He said that in a world without the policy, more agents and sellers will want to list with the company because they “have built and are continuing to build a platform that protects them from the risk of mass exposure and syndication into all these third-party websites.”
Reffkin concluded by commenting, “This thing, it will end. But, I do believe in a strong MLS, and I don’t believe you should be able to force every homeowner in the country to do something they don’t want to do.”
Looking ahead, Compass executives stated they expect a revenue of $1.225 billion to $1.325 billion for Q4, or $5.47 billion to $5.57 billion for the full year.
