Now that NAR’s clear collaboration policy is no longer supported by the real estate industry, how do we navigate this new territory? asks coach Darryl Davis.
Clear cooperation policies are not technically dead. That’s still the rule of the National Association of Realtors.
What is the reality? The vast majority of brokerages and agents across the country are currently ignoring this law, and MLSs are not enforcing it because it has gotten out of hand. If there are rules that no one follows or enforces, they are rules in name only. For all practical purposes, you’re done.
Now, with the recent announcements by both Zillow and Realtor.com that they will begin advertising upcoming listings alongside private listings on their platforms, we have crossed an insurmountable threshold. Two of the country’s largest consumer real estate portals have verified the very act the Chinese Communist Party was trying to prevent. The message is clear: fragmented markets are here to stay for the foreseeable future.
Fragmentation completed
As I have said for years, the Chinese Communist Party’s policies do not exactly prevent division, but rather promote division. I’m here. This policy could not stop the water, like a dam that tries to stop the rising waters of a river. It just forced me to find another channel. These channels are now mainstream.
The MLS is no longer the first place agents list their properties. It’s getting to be the last.
Consider the three-step listing process that is currently taking shape. The property starts as a private listing, limited to only a selected group. Then it becomes a “coming soon listing” to “generate buzz” and get early interest, and the listing agent is actually showing it to buyers.
And if it doesn’t sell, it will eventually land on MLS. What does that mean about listings on the MLS? It says that what appears on the MLS are listings that didn’t sell in the other two phases. That is our current reality.
Well, what is it? Strategies for a new reality
On the one hand, I consider this split a blessing. Because the Chinese Communist Party itself was promoting the very actions it tried to prevent, and now it is becoming irrelevant. Fortunately or not, the question agents and brokers must answer is, “What do we do now?”
1. Don’t lie to homeowners.
Brant, I know. And politically incorrect. However, I’m from New York, so sugarcoating isn’t an option. Any agent who sits across from a homeowner and tells them they’ll make more money if they take their private property to the public is telling them something that simply isn’t true. There is no evidence or data to prove it. That’s a lie. The opposite is also true.
If you want tons of research showing what private listings cost homeowners, visit PrivateListingsDebate.com.
2. Be honest about your actual strengths and weaknesses.
There are good reasons why homeowners choose a private listing, and an honest agent should clearly explain them. Privacy is one thing. The other is controlling screening and reducing stress. Having one agent handle both sides and having one cook in the kitchen instead of two can simplify the transaction. These are honest real benefits.
But higher selling prices are not included in that and agents need to stop pretending that is the case. You need to tell the homeowner that there will be costs and a lower selling price if they choose this route. Some homeowners choose to trade off convenience and stress relief. “Doordash” for home sales.
3. MLS needs to adapt to the new normal
MLS systems across the country need to stop fighting the tide and start swimming with it. The best example of this is what MRED has done by allowing private listings within their system. This maintains transparency among agents in the local market and gives buyer’s agents the opportunity to engage listing agents.
When a private listing exists in the shadows, no one benefits except the listing agent. If they exist within the MLS ecosystem, at least a framework for fairness exists.
4. Respect listing agents and co-brokers
If another agent gets on the phone with the buyer, allow a showing, or at least leave it to the seller’s discretion. Blocking it without their knowledge (and without their written approval) creates significant legal risks. If the other party later finds out that you turned down an eager buyer, you could be sued in court for failing to act in their best interests.
5. If you are a buyer’s agent, start building a relationship with your listing agent now.
Successful buyer’s agents in fragmented markets are those who have strong relationships with local listing agents. If your listing doesn’t appear on the MLS first, you’ll need to hear about it through your professional network. Call the listing agent. The Attendance Broker will open. Be known as someone who brings qualified, serious buyers to the table.
6. The buyer’s agent claims that the buyer needs you now more than ever.
When a portal becomes fragmented, it loses its value as a single source of truth. This is the most powerful argument against representation in recent years. Buyers now need experts to navigate the scattered landscape. That’s you.
7. Double down on your exposure value proposition
For those listing agencies, this is an opportunity. If you have data, comparable sales, a clear marketing strategy, and can demonstrate a measurable difference between limited exposure and full market exposure, you will be the agent of choice. What we teach our agents is to lead with values and lead with truth. Agents who can clearly explain the financial costs of going private will win listings and better serve their customers.
The road ahead
The real estate industry is undergoing the most significant transformation in decades. The Chinese Communist Party may still be on the books, but the market has voted with its feet.
The question is no longer whether private vs. upcoming listings will prevail. The question is: Will we navigate this new territory with integrity, or will short-term gains undermine the trust consumers have in us?
I know which side I’m on. Please join us.
