Could portals ‘go full-blown brokerage’ if Clear Cooperation goes away? 

The industry may be adjusting to the post-settlement world, but some leaders dominating the recent debate over Clear Cooperation suggest that more upheaval could be coming.

A growing number of real estate leaders have been speaking out about the Clear Cooperation Policy (CCP), NAR's rule that provides guardrails to pocket listings. Some support the spirit of the policy while others want to see it totally repealed.

So what happens if Clear Cooperation goes away?

That was one of the questions debated this week during a web panel hosted by real estate data provider Local Logic. 

Home search portals could compete head-to-head with brokerages

If the CCP goes away — and a meaningful share of listings move off the MLS — that could be the moment where portals cease being the proverbial industry bogeymen and become an existential threat to agents and the broader brokerage world, warned panelist James Dwiggins, CEO of NextHome and co-host of the Real Estate Insiders Unfiltered podcast. Dwiggins has been a vocal advocate of keeping the policy (with some revisions).

"[The portals] could say we're sick of the stupidity of this industry and we're just going to go full-blown brokerage," he said, adding that the company people should be paying attention to right now is Redfin, particularly in light of its rapid expansion of Redfin Next. 

"Redfin just got away from doing employee-based agents, and now they're doing traditional brokerage. They're recruiting people. They've got the best portal in real estate."

Zillow is also well-equipped to take on the brokerage world, Dwiggins continued.  

"If Zillow decided — with 220 million unique visitors — to say, 'We're gonna go take all the teams that are paying us money and bring them over to Zillow Brokerage,' that's going to be scary for everyone," he explained. 

And that's a plausible scenario, Dwiggins said, if the portal suddenly loses access to listings. 

"They aren't going to sit back and go rolling in at 50% of the inventory. They will pivot, and they will pivot hard. And if they did, the very thing the industry has been scared about for 20 years could become reality based upon this decision."

Pocket listings: A free-market approach, or anticompetitive?

The group also debated the relative merits of pocket listings and private listing networks, with some arguing that they have a place in a competitive marketplace, and others expressing concern that taking listings off the MLS — and limiting who has access — has the potential to make already-big brokerages even bigger while weakening the existing MLS structure. 

Redfin CEO Glenn Kelman shares that view, and said as much in a recent Inman op-ed, warning the industry of the possibility for an emerging monopoly in real estate and a watered-down version of the MLS "that isn't an MLS at all." 

Big brokerages aren't the only potential threat to MLSs, added panelist Audrey Whittington, SVP of Strategic Partnerships & Industry Relations with Local Logic. 

Just as a Zillow or Redfin could try to take over the brokerage space, a severe deterioration or breakdown of MLS data could embolden one of the portals to step in to replace the MLS — much like CoStar is the de facto MLS for the commercial real estate world, Whittington noted. 

Portal leaders aren't signaling a hostile takeover

For now, however, those worst-case scenarios of an industry ruled by portals appear to run counter to the positions of the portal leaders themselves.

Redfin's Kelman and Zillow President Susan Daimler have planted themselves firmly in the pro-CCP camp, with both leaders warning of the consequences of eliminating Clear Cooperation, highlighting issues with access to listings, home sale prices and Fair Housing concerns. 

"We feel like these private listing networks are terrible for both consumers and for agents," Daimler told Real Estate News in a recent interview. "It's anti-transparency. It's basically going back in time to a place where buyers can't see everything and sellers are greatly disadvantaged when they're trying to sell their homes."

Dwiggins shared a similar sentiment during the panel, saying that ending Clear Cooperation will "create a marketplace that will take us back 20 years minimum, and it will be horrendous for the consumer." 

But ultimately, Dwiggins said that he doesn't believe Clear Cooperation will be removed or repealed entirely. 

"The reason these policies are here is for the lowest common denominator, and I don't know how you change any of that until brokers stop hiring people that don't know how to do their job."