Why Clear Cooperation and Going On-Market Matters

If you had the choice to sell your house for $20k less, would you make that choice?

As you'll read in the headlines below, a new study by Zillow showed that home sellers who sold without putting their home on MLS left more than a billion (yes, with a "b") dollars on the table over the past two years.  In Massachusetts, the average off-MLS seller sold for 3.4% (over $20k) less than they would have had they listed on MLS.

These numbers should really, really stand out to you.  And they are being presented at a time when there's a heated debate raging across the industry regarding the clear cooperation rule, a policy established by NAR to promote transparency in real estate listings.  It requires real estate agents who are members of an MLS to submit their listings to the MLS within one business day of marketing the property to the public.

Many companies - with Compass being at the forefront - say that they're against Clear Cooperation.  They say that sellers should have a choice about how they list their homes.  I think that sellers should have a choice, too!  But what's being missed here is that the choice needs to be informed.  All agents need to make it (dare I say) clear to their sellers that if they choose to forego MLS, they're almost definitely leaving money on the table.  And, as we know now, it's likely no small sum.

Now, some sellers may still want to go this route.  To do "story time" for a minute, I once had a client who wanted to sell an investment property that was tenanted by a woman who was a bit of a hoarder.  She also had recently lost her husband.  Also also, she had paid rent on time every month and never really asked my seller/her landlord to fix much.  Lastly, my seller really wasn't concerned about squeezing every last penny out of the sale.  So, long story short, he decided that it would be best for me to market it off of MLS.  Which I did, and we got it sold.  All parties were happy, respected, and informed.

However, that example is the exception to the rule.  It's the only listing I've ever sold off MLS, and there's a reason for that.  Most sellers like money.  Most people like money.  What's perplexing to me is that what people also seem to like these days is the allure of a "private sale" and the status it implies.

My hot take is that the agents and/or companies that aren't fans of Clear Cooperation might mention that their sellers have options - and even that an on-MLS/on-market sale will likely yield a higher sale price - but they're not explicitly laying out the data.  They're leaving the cold hard facts out in favor of a sexy sales pitch a la "you Mr. Seller are so special and your house is so lovely that you don't need the peons from that 'other' part of town clumsily traipsing through during an open house.  Why do that when we can have a wine and cheese party and only invite a select few elites?"  Are those select few elites likely to be from other companies, thus necessitating the commission to be split?  Hell no.

And that's what this really boils down to: greed.  Not choice.  Greed.  Anti-Clear Cooperation people are interested in their own pockets, not the pockets of their clients.  The smaller and more hand-picked the buyer pool, the more likely the brokerage is to keep a bigger piece of the payout pie.  I felt this way before this study was published, and now it's just...wait for it...CLEAR as day.