Robert Refkin said, “We want to create a national MLS that competes with local MLSs,” hinting at further MLS expansion in the future.
As a wave of regional multiple listing services expands across the country in partnership with the nation’s largest securities firms, Compass CEO Robert Refkin reveals why he’s behind the effort.
Mr. Refkin’s remarks came days after Chicago-based MRED and Nashville-based Realtrax announced that the two major MLSs would begin accepting subscribers across the United States. The two companies said they had reached an agreement with Compass to introduce the brokerage firm’s listed properties.
In comments made on a call with investors after Compass announced first-quarter results, Mr. Levkin said Compass is supporting the company’s expansion efforts and that those efforts will continue.
“Not only are we implementing MRED nationally, but we are also targeting a select number of MLSs that sellers choose, providing all listings there and subsidizing agent participation,” Levkin said. “We don’t want to create a national MLS to replace our local MLS. We want to create a national MLS to compete with our local MLS.”
“If they have to compete, who will they compete for? For us. For the agents,” Levkin added. “Agents should have more choice. Sellers should have more choice, not less.”
Industry experts told Inman in recent days that they expect the trend of MLS consolidation and expansion to accelerate following the MRED and Realtrax announcements, especially as more brokerages join Compass.
“The big companies are going to get even bigger. Smaller companies are probably going to have to decide what to do next,” Solid Earth CEO Eric Stegeman told Inman. “That could mean merging or folding into a larger organization.”
Eric Stegemann | Solid Earth CEO
Mr. Levkin also used Tuesday’s conference call to claim some credit for the nation’s largest real estate search portal’s recent rapid change in direction, as companies began offering properties that were soon to be published.
“Look at what we started at the beginning, we now have Zillow Previews and Realtor Previews and will soon be available on all these sites,” Levkin said.
In response to Compass’ efforts to ensure that Compass agents can only sell their listings on Compass.com and not broadly via the MLS, Zillow has implemented a policy that prohibits listings as Coming Soon listings if they are not distributed anywhere the portal can syndicate them.
In February, Compass announced it had reached an agreement with Rocket Companies to display pre-market listings on Redfin before distributing them via MLS. Three weeks later, Zillow announced that it would also show upcoming listings.
“Didn’t sellers have that right five years ago, 10 years ago? Why couldn’t they? Shouldn’t sellers have more options, not less?” Levkin said. “We are promoting this system to give sellers and agents more choice and less obligation.”
“Sellers should be the only ones deciding how to sell their homes in light of the law, fiduciary duties, and statutory obligations,” Levkin says. “MLS rules are just business rules, and it’s a private organization.”
Three stages of marketing change
During the conference call, Levkin also shared recent updates on Compass’ agent shifts using a pre-marketing strategy the company calls “three-tier marketing.”
Levkin said Zillow’s policies have significantly reduced the number of pre-market Compass listings, but its share is growing after its partnership with Redfin and its prioritization of soon-to-be-listed MLSs.
“We’ve seen an increase in three-tier marketing. We’re in the middle of the spring market, which is normally heading into the third tier, so the increase was modest, but we definitely saw an increase,” Levkin said. “Soon, we went from I think it was in the low 20s to the mid-30s, and we expect it to go higher in the coming months.”
“My expectation is that 80% of our listed properties will pass the Coming Soon phase. This expectation comes from the fact that 90% of our listed properties started out as Coming Soon before strict rules of clear cooperation were introduced.”
According to historical data shared by the company, most of these listings eventually reach the third stage of marketing, meaning they receive widespread distribution via MLS.
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