Profile in Courage: NAR Leadership

NAR punts on Clear Cooperation Policy

From Real Estate News comes news that NAR has punted on making a decision on Clear Cooperation Policy:

A key NAR group has made a decision regarding the future of the Clear Cooperation Policy. And that decision is … no decision.

Instead, the MLS Technology and Emerging Issues Advisory Board, which met last week to continue reviewing the contentious policy, "opted not to make a recommendation about CCP or take any other action," a spokesperson for the National Association of Realtors told Real Estate News on Monday.

There is no timeline for an actual decision, nor is there anything resembling a next step. Instead, we get word that the Advisory Board turned it over to the Leadership Team… who will “carefully weigh feedback from a wide range of members, stakeholders, and industry experts.”

Because what’s been missing from the whole debate about Clear Cooperation Policy is feedback and opinions and recommendations. Clearly, the eight people on the Leadership Team do not have enough information, enough feedback, to make a decision. I mean, CCP has only been an issue since… when was it passed? 2019? Plus, there have been two lawsuits because of it. And an ongoing DOJ investigation, which began in 2020 the first go-around.

Clearly the Leadership Team needs more information to make a decision.

And by “more information” I mean figuring out which way the wind is blowing. After all, what defines leadership more than watching which way the crowd is marching then rushing to the head of it?

The Charade Continues

As a result, we will have the charade continue where NAR pretends to consider eliminating or really changing CCP and everybody else pretends that it matters. It should be obvious to those with logic and reason that NAR cannot and will not change CCP, and obvious to those with foresight and ability to see where the puck is headed that it won’t matter what NAR decides to do.

CMLS and the Freudian Slip

The reason why NAR cannot and will not change CCP in any material way is laid out by Council of MLS in its recent letter. After laying out a bunch of preliminary stuff, then saying that “CCP preserves the core value of the MLS”, which everybody and his cousin expected, we get this:

Repealing CCP hastily is both reckless and unnecessary. Many adjustments to the policy have been proposed and should be evaluated more fully over a more deliberate timeframe. NAR should not view CCP as an “either/or” problem, but as an opportunity to fine-tune mandatory listing submission, the remaining pillar of MLSs’ unique role in the residential real estate market.

The remaining pillar that preserves the core value of the MLS? Why yes, because even if the hoi polloi of real estate do not yet realize it, the MLS CEOs whose paychecks depend on the MLS have realized what I wrote about in this post and this post.

Without cooperative compensation — the guarantee of payment for bringing a buyer — the MLS is simply a database of listings.

Which is why mandatory listing submission is the remaining pillar of the MLS’s value, and which is why CCP is so critical to maintaining the value of the MLS.

Which is why NAR will never eliminate or substantially weaken CCP, at least not until there’s some other way to prop up the value of the MLS which drives NAR membership numbers. It is no secret that without the MLS, REALTOR membership numbers would plummet, dues dollars would crater… and NAR isn’t ready for the scale of cost cutting that would need to ensue.

Nonetheless, since there are “passionate” voices on the other side of this and some of those voices are from very large brokerages, NAR has to pretend that it will think about one day considering changing the sole remaining value of its goose that lays the golden egg.

It Doesn’t Matter

Thing is, it really doesn’t matter what NAR decides to do, doesn’t decide to do, or punts on deciding anything at all.

First, NAR may not have a choice. As referenced above, we know that the Dept. of Justice has sent out CIDs (civil investigative demand) to a number of organizations, including a lot of MLSs with pointed questions about CCP.

This isn’t new. Back in 2020 when the DOJ was suing NAR the first time around, it sent a CID to NAR on CCP:

In June 2020, DOJ served its second CID — CID No. 30360 (“CID No. 2”) — which sought information from NAR about a newly adopted rule called the “Clear Cooperation Policy.” That policy requires listing brokers to post a property on an MLS within one day of when they begin to market the property. DOJ believes that the Clear Cooperation Policy restricts home-seller choices and precludes competition from new listing services.

Once the Appeals Court spanked NAR on its shocking trial win, the DOJ got busy serving that same CID to a bunch of folks.

A round two of a lawsuit by the DOJ against NAR may be coming. Which is why it makes so much sense to punt any decision to after NAR gets sued for federal antitrust violations, right? Leadership means waiting to get sued before you act, not acting to prevent getting sued… according to my last Doordash delivery guy.

Second, there is at least one active lawsuit pending against NAR. PLS.com v. NAR is scheduled to go to trial in April. Since that lawsuit was revived after the 9th Circuit more or less gave clear directions on how the lawsuit should go, NAR will lose that case. PLS.com will walk away with some more NAR member dollars, and NAR will be forced to change CCP by court order.

But by all means, wait to act. Gather more passionate feedback from stakeholders. Waste more time soliciting formal recommendations from a variety of organizations. Kick the can down the road once again, because leadership means holding meetings, and then holding more meetings.

Third, in the absence of any legal action forcing change, as I wrote previously, big brokerages have already figured out that the MLS is the principal vehicle through which small brokerages are enabled to compete against them, using their own listings. Without the guarantee of payment, the MLS becomes quite a different deal than it was in the Pre-Settlement Era.

NAR could punt the decision, and large brokerages could punt the MLS. Now does the decision on CCP matter?

Profile in Courage

Wherever you stood with respect to CCP, a decision would have been welcome. In fact, a decision was needed.

Reasonable people can disagree, even passionately, but conflict has to get resolved so everyone can move on. Now? There is no moving on because everything’s been punted. That might have been the thinking of NAR Leadership, to buy time for as long as possible. That’s… brave.

Leaders lead, by definition. Sometimes that means making a decision that isn’t going to be universally popular. It often means making decisions in the absence of perfect information. That’s what it means to be a leader.

NAR partisans will undoubtedly mouth the corporate spin: NAR will "continue to evaluate CCP in the broader context of the issues facing NAR and the industry," and "consider ongoing litigation and DOJ investigations." If only those things had not been going on for the past five years… then the Defenders of the Faith might have a point. As things stand, their only point is that they love NAR and love means never having to say you’re sorry, or something like that.

Instead of engaging, instead of making the hard choice, NAR punted and ran away. With that decision not to decide at all, NAR has guaranteed more months of conflict, of bad feelings, of internal fighting, of liability, and of uncertainty.

Brave, brave sir NAR.

-rsh