Agents and leaders have long been skeptical of Compass’ efforts to disrupt local MLS. But according to research from Intel Index, the latest proposal may have an effect.
In a study after Intel’s, agents and leaders at brokerages other than Compass have expressed deep skepticism about CEO Robert Refkin’s long-standing efforts to wrest control of listing data from local MLSs.
So when Refkin took the stage at Inman Connect New York last month, his vision for a national MLS seemed carefully crafted to allay those concerns.
Under Mr. Levkin’s new proposal, a national federation of brokerages would share data with each other through a new jointly owned listing platform. He said the platform will be managed by an independent board of directors and that Compass will have “no vested interest in it.”
The proposed structure appears to have caught the attention of leaders and agents across the securities industry, according to an analysis of Intel’s February survey responses. And while many are skeptical about Compass’ motivations for the proposal, most survey respondents said they could be persuaded if the details were correct.
While brokerage professionals of all types responded to February’s survey, this analysis focuses specifically on the group Refkin would need to persuade the most to make such a platform a reality: agents and leaders of competing brokerages, many of whom are wary of Compass gaining an even larger foothold in real estate.
And early indications are that the proposal may have an effect.
In the full report, read about what the industry needs to fully participate.
An interesting industry
Compass distributors are already lining up to support the idea, according to February findings.
But to get this off the ground, Mr. Refkin will need to get other brokerage leaders to sign on, and those leaders will likely want broad support from their agencies to move forward with a project of this size.
For these reasons, Intel spent most of its time investigating how agents other than Compass responded to questions about the proposed structure.
question:
“Compass CEO Robert Refkin recently proposed replacing regional MLSs with a single national MLS owned by a consortium of brokerages. He said Compass would have “no disproportionate ownership” and the platform would be governed by an independent board of directors. Does this structure appeal to you, regardless of who proposed it?”
Response sharing, Compass and unrelated agents:
18% — Yes, this is the right path. 39% — Yes, I’m open to this structure, but I need to see more details. 22% — No, I’m not a fan of this idea, but with proper planning I might change my mind. 21% — No, this is leading the industry in the wrong direction.
This means that among respondents from agencies not affiliated with Compass, 57 percent were fully interested in the proposed structure, even if some questions remained unanswered. And only 21% said they strongly disagree with the idea.
Executives at securities companies other than Compass expressed the same level of interest in the proposal as the agents, but a slightly larger percentage (30%) were in the “definitely no” opinion.
Not surprisingly, longtime Compass agents were even more supportive of the idea. And the agency with its recently acquired Anywhere brand has landed somewhere in the middle.
As a result, we are beginning to see an industry where a wide range of agents, including those outside of Compass, are actively participating in this discussion. But it’s also an issue where Mr. Levkin and Mr. Compass will have to do a lot of work to ensure that this structure benefits all brokerages.
winners and losers
One of the biggest obstacles facing national MLS proponents is the perception that the platform actually serves Compass’ interests rather than those of the broader securities industry.
A Compass competitor agent explains the most likely impact such platforms will have on brokerage competition:
question:
“Which of the following most accurately describes the expected outcome if a brokerage firm were to build a national MLS platform such as the one described by Mr. Refkin?”
Response sharing, Compass and unrelated agents:
30% — The majority of brokerage firms will be better off. 32% — Gives companies like Compass a competitive advantage, but gives smaller brokerages less say in how their data is used. 10% — The majority of brokerages, including Compass, will be worse off if the industry moves away from local MLSs. 10% — Will not have a material impact on the intermediary’s success or competition. 18% — Other (written response)
This concern likely largely explains why many agencies and leaders outside of Compass are reluctant to hand the project a blank check, even those who are attracted to the idea of a national MLS owned by a brokerage firm.
Broker owners and executives from companies other than Compass were even more likely to say that Mr. Refkin’s domestic MLS structure would likely give Compass a competitive advantage, despite the CEO’s insistence that the board be independent. This is the main concern that Mr. Refkin will need to address.
But that wasn’t the only concern.
Is it a Jiro beater?
One thing a wide range of agency and brokerage leaders agree on is that brokerage-owned listing platforms are likely to pose a major challenge to Zillow. Zillow’s data is primarily based on contracts with various local MLSs.
Still, some differences in reliability were observed.
question:
“If brokerages partnered to create their own national MLS, how likely do you think that new platform would replace Zillow as the most used real estate portal by consumers?”
Response Share, Compass+Anywhere Agent
42% — Very likely 35% — Somewhat likely 18% — Somewhat unlikely 5% — Very unlikely
Response sharing, Compass and unrelated agents:
22% — Very likely 37% — Somewhat likely 27% — Somewhat unlikely 18% — Very unlikely
A majority of agencies outside of Compass (59%) believed such projects were more likely to be successful with consumers on behalf of Zillow, but that percentage was lower than within Compass operations (77%).
Leaders’ responses to this question closely matched agents’ sentiments.
It is clear from these results that any proposal would need to address many issues and appease many competing forces before it would be fully supported by the securities community.
But for agents looking to see the real estate industry post-Zillow, Levkin’s proposal seems like an attractive starting point.
Methodology note: This month’s Inman Intel Index survey was conducted from February 19th to 26th and received 914 responses. The entire Inman reader community was invited to participate, and a rotating selection of randomly selected community members were encouraged to participate via email. Users answered a series of questions about their self-proclaimed niche in the real estate industry, including real estate agents, brokers, financiers, and proptech entrepreneurs. Results reflect the views of our passionate Inman community, but do not necessarily align with the views of the broader real estate industry. This survey is conducted monthly.
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