Industry Decoded: It’s time to do away with NAR’s arbitrary rules 

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The views expressed in this column are solely those of the author.

There has been a lot of discussion in the industry news lately about the Clear Cooperation Policy (CCP), most of which I have absorbed. Knowing that I focus on staying informed, several people have asked for my opinion over the past few weeks. I often keep opinions to myself, but on substantive matters, leadership requires leaning in with a voice, and I hope mine can add reason and a different perspective to the conversation.

For those unfamiliar, the CCP is a rule adopted by the National Association of Realtors in 2020 with what I consider to be the fallacious intention of creating a more "open market." Since its creation, the rule has been hotly contested by both advocates and detractors.

The problem of enforcement

As with many rules devised by NAR, it was delegated to the underlings to enforce. In this case, that meant the association-owned MLSs, who did so with threatened participant restrictions, which varied market to market, and in some cases $1,000-$5,000 fines.

These MLSs soon realized they had stepped in a pile of manure by issuing such threats to their paying subscribers when one broker complained about another broker marketing their listings off the MLS. So, rather than issue a fine, many MLSs promptly punted it back to the associations for resolution, effectively neutering the rule.

Ignoring the needs of the consumer

Let's be brutally honest: The CCP was created to protect smaller brokerages against larger brokerages, who could accumulate market share by promoting themselves as firms that sell properties quickly. Yet, such protection totally disregards the consumer's need. Selling their property quickly is all they care about, period. They don't care by whom or how, they only want a specific outcome, and they want it now.

It is a simple reality that a brokerage with 2,000 agents, structured properly, has a higher likelihood of selling a property fast by exposing it to their own agents first. With such a large prospect pool, it's likely that another agent within the firm will have an active buyer. Conversely, a smaller brokerage with only 50 agents may not have this same possibility because the pool of potential buyers may be smaller.

Are the buyer clients of the larger brokerage any less entitled to listing information than the buyer clients of the smaller brokerage? Capitalizing on competitive advantages is called free enterprise, and it is the foundation of business.

Brokerages can grow — or die

All the new rules and regulations imposed upon our industry, when coinciding with economic and inflationary pressures, have thrust this industry into a pressurized "grow or die" environment.

An organization either grows, or it will die — maintaining the status-quo will inevitably lead to decline. Arbitrary rules made up by an association cannot change this — or "level the playing field," as some have called it — as it is the natural order of all economic systems.

A misguided attempt at fairness

While I fully grasp the concept of fairness, one must ask: Fairness for whom? Mandating fairness may be a valiant concept, but in the end, the seller just wants to sell, and the buyer just wants to buy. Why should we insist on imposing our own demands and prejudices on that process? Our raison d'etre as real estate practitioners is to make a transaction happen as fast as possible, however possible. That is our job.

Some say that broader listings exposure brings more competitiveness to the marketplace. But if the contract price is agreeable to both parties in a transaction, to them this IS fair value. Of course, the caveat there is full disclosure to both, and an argument could be made that the only way to achieve full disclosure is by dispersed markets — but it's questionable whether the time required is worth the gain. 

Markets always have been and always will be imperfect. But left alone from artificial influences, Adam Smith's "Invisible Hand" will always right the ship to achieve relative equilibrium.

Time to do away with the top-down approach 

The CCP is yet one more rule created by NAR without member input — but with the expectation of member compliance. How many times do we need to be sued for collusion and conspiracy before we push back and distance ourselves from actions that create liability? Unknown individuals sitting behind closed-doors — with no understanding of the needs or conditions in each geographic marketplace — should not pass rules that affect private businesses all across the country.

Not only is such a practice dangerous, it forces the opinion of a select few bureaucrats onto the population of practitioners. The phrase "rules for thee, none for me" rings in my head.

In today's highly litigious environment, centrally dictated and arbitrary rules will cause havoc in our industry, further damaging our reputation with the consumer. It's time to stop these attempts at social engineering, develop a laser focus on the consumer, and take care of business. The rest of it is just noise.

Phillip Cantrell is the founder and CEO of Tennessee-based Benchmark Realty LLC, which he has grown from one employee in 2006 to more than 1,500 today, with offices throughout Middle Tennessee, Southern Kentucky and Northern Alabama.

His 42 years of business experience include executive roles in operations and sales, and he has published numerous industry articles.