The ongoing battle between Compass and the MLSs

HousingWire

On today’s episode, Editor in Chief Sarah Wheeler talks with Senior Managing Editor Tracey Velt about real estate news, including the latest in the battle between Compass and the MLSs. The two also discuss advice from Keller Williams’ Jason Abrams on how lenders and real estate agents can work together to do more business in this market.  Related to this episode:  CRMLS went on offense against Compass. Will other MLSs follow? https://www.housingwire.com/articles/crmls-sues-compass-cooperation/  HousingWire | YouTube⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ https://www.youtube.com/channel/UCXDD_3y3LvU60vac7eki-6Q  More info about HousingWire https://lnk.bio/housingwire  Top 5 Trending:  Pennymac deploys VantageScore 4.0 across all production channels https://www.housingwire.com/articles/pennymac-vantagescore/  Vishal Garg regains control of Better’s board after receiving 52% shareholder support https://www.housingwire.com/articles/garg-regains-better-control/  CRMLS went on offense against Compass. Will other MLSs follow? https://www.housingwire.com/articles/crmls-sues-compass-cooperation/  What’s next for housing: 7%, 8% or 9% mortgage rates? https://www.housingwire.com/articles/whats-next-for-housing-7-8-or-9-mortgage-rates/  HousingWire names Laura Monroe Head of Industry Relations https://www.housingwire.com/articles/housingwire-names-laura-monroe-head-of-industry-relations/  Want more from Sarah? Don’t forget to subscribe!  The HousingWire Daily podcast brings the full picture of the most compelling stories in the housing market reported across HousingWire. Each morning, listen to editor in chief Sarah Wheeler talk to leading industry voices and get a deeper look behind the scenes of the top mortgage and real estate.

Transcript

00:10Welcome, everyone. My guest today is Senior Managing Editor, Tracy Belt, to talk about

00:15real estate news, specifically the latest in the compass battle against the multiple

00:19listing services. Before we dive in, here are the top five trending articles on housingwire.com.

00:24The first is PennyMac deploys Vantage Score 4.0 across all production channels.

00:30Followed by Vashal Garg regains control of betters board. Then we have CR MLS moves first,

00:37asking the court to block compass antitrust claims. And our tracker on seven, eight or

00:429% rates continues to attract attention. And finally, a story about one of our own housing

00:47wire names Laura Monroe, head of industry relations. Okay, we are ready to dive in. Tracy, welcome back

00:53to the podcast. Thanks for having me on again. Of course. And I say that welcome back to this

00:58podcast. You host your own podcast every week, Real Trending, which is amazing. You interview

01:04real estate leaders. And everyone who listens to this should also go check that out. But

01:09today, I wanted to really recap some of the incredible, I feel like we have breaking news

01:14on the real estate side every single day. So I want to go over some of that. And then

01:18I want to recap what Jason Abrams said of Keller Williams said at our mortgage banking summit last

01:24week, which is really his advice to mortgage lenders who want to do more business with their

01:30partners. So we've got a great show. So let's start at the top. I would say the biggest thing

01:35happening in real estate, or at least one of the most compelling stories is what compass is doing

01:40with the MLS, the MLS is. How would you describe where we are in that battle right now?

01:47Well, where we are is that in September, compass sent a demand letter to threatening to sue the

01:56California regional MLS, alleging that its rules violate antitrust law. And it's really about clear

02:04cooperation and private listings. Robert is saying that there were ways to market private listings

02:15before. And all of that disappeared after this MLS roundtable, and I think it was 2019, where they

02:24all changed their rules, and that they don't feel it's in the seller's best interest to not have

02:32everything. Well, CRMLS believes that in transparency, and that all of these listings, if they're on the MLS

02:40should be publicly available. And just to just to say, Robert, there is Robert Refkin, the CEO of

02:46compass. Yes, yes, Robert Refkin, the CEO of compass. So the latest in all of that is that

02:54the California regional MLS or CRMLS has kind of punched out first, because compass has threatened

03:02them with it with a lawsuit. And they're asking a federal court in New York to affirm the legality

03:08of its cooperation rules, because they rejected compass's demands that the MLS change how it

03:14publicly markets listings, how they're shared. So they're looking for a declaratory judgment that

03:22its policies are fair, you know, pro competitive and legally sound, so that they have that ruling

03:29before compass files against them. Whereas, you know, they've also said that compass has pushed for

03:36years to soften cooperation requirements. And compass is saying our agents shouldn't be fined for not

03:43having, not sharing, for the way that they market their listings, basically. And the interesting part

03:51to me is really this, I haven't heard too many other brokerage firms coming out with compass about this.

04:01So that I think is really an interesting thing. I think that a lot of brokers, it's about data

04:07protection. A lot of brokers do feel like they, it's their data. It's not the MLS's data, they're

04:16sharing their data with the MLS. In fact, I had a podcast with Smokey Garrett of Go Network of Keller

04:22Williams. And he was talking to me about how, you know, the broker data, how that's shared,

04:31and how it's monetized. And, you know, there's been some confusion over whether the MLS's are

04:39monetizing the broker's data or not. That isn't in most cases, honestly. And most of the MLS's are saying,

04:48we're just the stewards of your data. We're providing the most complete set of data for

04:55consumers. So this will be interesting how it shakes out because it could really change the way

05:01private listings are shared and marketed. And, you know, again, what Robert Refkin is saying is that

05:10a lot of these MLS's had policies for private listings ahead of, you know, years ago that they

05:18changed. And it was some MLS roundtable that, I guess, caused the changes. So it'll be interesting

05:27how that all shakes out. So, you know, we have, Compass is now, right, the largest real estate brokerage

05:34in the country, in the world, we could say, after one and two merged after the acquisition.

05:41So what they do matters. But also, I mean, Robert Refkin, he has a very proactive, aggressive goal

05:48here to sort of disrupt the way that things have been going. And as the, you know, CEO of the

05:55largest

05:55thing, he sort of has that weight to throw around. Yes. And they, you know, Compass, basically,

06:02they said in a statement to us is that homeowners should be able to publicly market any listing,

06:08including office exclusive listings without their agent facing thousands of dollars in fine

06:13fines. And the MLS's are saying we lost compensation with the NAR settlement. Now we may lose cooperation

06:23as well, which is the main value of the MLS. So there are concerns on both sides. And in what's

06:32decided could be as big as the NAR settlement with eliminating cooperation and causing a lot of

06:41these private companies to develop their own networks, which is already happening to some

06:46degree. Yeah. I mean, I think the question in all this is how, what serves the consumer best? And

06:52you have people with really different opinions about that. For instance, you know, what Robert

06:57Rifkin said there was like, you know, they should be able to do this. On the other hand, you think

07:01if you don't have that centralized place, like an MLS, it can feel like you've just thrown something

07:07into chaos that, that had been organized previously. Well, a lot of the MLS's are working with him and

07:14developing policies that they feel are win-wins. And one of them is the Northwest MLS. And so what

07:23they're doing is they're saying you have to enter these listings into the MLS, but we will, we will

07:31work with you on it being a private listing for a certain amount of time. And it allows that flexibility.

07:39But the other side of this is that private listings have been around forever. There, there are, you know,

07:46definitely situations where you want to use one. Um, and what Gary Keller had said in an op-ed for

07:52us

07:53is, you know, but is it disclosed in a way that the seller understands what they may be giving up

07:58by

07:58doing it this way? Um, so there's a lot of nuances to it, um, you know, including seller disclosure and

08:05what the ultimate goal of the brokerage is. Um, and you know, compass is saying we want, we want

08:14fairness and to be able to, you know, run like, like a company with our own rules and the MLS's

08:21are saying, but no, the value of us is that we're, you know, our cooperation side. So.

08:27Really interesting thing. And I feel like you and your team are doing a great job keeping us on top

08:32of this. Uh, there's lots of, uh, news every day about it, but to me, it also comes back to,

08:37um,

08:38following the, the, uh, commission settlement is that there's just a lot more conversation that has to

08:43happen with, with agents and their buyers and sellers. Like what's covered, how are we doing

08:49this? Like it, when you, when you change these things and that just means like more communication

08:54and in some ways it's like, okay, well that, that is another distinguishing point between agents,

08:59agents that are good agents that understand this and can guide their, uh, buyers and sellers through

09:04this versus, you know, uh, the maybe number of agents that are just doing this like as a hobby.

09:09Yeah. And this was a big topic at the CMLS, the council of MLS is, um, conference that

09:16Brooklyn Hahn, our senior real estate reporter covered, um, exclusively. And they, you know,

09:22there was a whole panel about mitigating risks and the legal risks, because the truth is you've got

09:29the antitrust, um, lawsuit filed by Zillow against the council of MLS, uh, member Midwest real estate,

09:36um, data, um, data and compass. You've got the department of justice and the FTC re-examining

09:43guidelines for brokerage, um, cooperation and competition. And then you've got compass taking

09:49this massive stand against CRMLS and really all MLSs. So to me, at some point it is going to come

09:57to a head. And, you know, the other side of that is also the, the data, um, security when it

10:05comes to AI,

10:06because that plays a part in all of this as well is, as AI using the data, um, in a

10:14way that is

10:15against the guidelines of the MLSs or the brokers. Um, and of course there are really no major policies.

10:22They're starting to build infrastructure around that now. Um, but that's another issue as well.

10:28So lots, lots coming and lots to be decided. Lots to be decided. Well, let's talk about some of the

10:34other news. Uh, one thing that happened, uh, really recently is the merger, uh, Bed Bath & Beyond,

10:41um, getting into, uh, the potentially the, the real estate space looks like that's not going to happen.

10:46Tell us about that. No. So, um, Bed Bath & Beyond is now Neighborhood Intelligence, Inc.

10:52Um, and you know, they, they said that the current market valuations don't reflect fair value and that,

10:59um, they're ending, they're mutually ending the merger agreement. But before that even happened,

11:05they had discussed that they wanted to do, um, a digital assets purchase. That Bed, Neighborhood

11:13Intelligence or Bed Bath & Beyond would purchase digital assets. And so that is still a possibility. Um,

11:20it halts that right now, but you know, they, they want to, it says they both boards concluded that

11:28moving forward at current share prices would not be in shareholders' best interest. However, I think

11:33that the technology data and other assets have the potential for long-term value, um, according to

11:39Fathom. So I think there's some hope that possibly some of the digital assets could be sold. Um, but,

11:47you know, TBD on, on what happens with, with Fathom, but it looks like it's the end of the

11:53Neighborhood Intelligence or Bed Bath & Beyond, um, transaction at this point.

11:59Which it was super interesting when we heard about it and, and we'll see if it, uh, if it comes

12:03back,

12:04but you know, this is a tough time for, uh, for valuations for, for these kinds of things. Are there

12:09any other, before we get to the Jason Abrams, any other, uh, real estate news that you think we should

12:13talk about? Um, the biggest news to me is really just what's going on with the MLSs right now. Um,

12:21and we've been covering that pretty extensively. I know that, um, we've got some reporters on, um,

12:29on location at an upcoming EXP conference. So we'll probably get some really interesting

12:34information on their stand with all of this, um, and what's going on with them. Um, but,

12:41but I say you just keep coming back to HousingWare for more information on this. You can

12:45be up to date. Love it. Love it. Okay. Well, um, I wanted to talk about, so, uh, last week

12:51at the

12:51Mortgage Banking Summit, uh, was really fun. I think this is one of the things that HousingWare

12:55does so well. It was a Mortgage Banking Summit, but we brought in Jason Abrams, executive at Keller

13:01Williams, to talk to the lenders there to say, here's how you can get more business, uh, with your

13:06referral partners, right? With your real estate things. And I, it was one, um, at lunch, everyone

13:12was talking about that session at the end. It was just a really great session because first of all,

13:16he's great on stage, right? He's super direct. He'll say exactly what he thinks. We love that.

13:21And it was very practical things. And some of those things I was surprised by. Um, and I think people

13:27in

13:27the audience were surprised by this is a tough market, you know, rising interest rates hits everyone.

13:31It hits the agents, it hits the lenders. And a couple of the things that he said really stood

13:36out to me. And one of them was, um, you know, what, don't be afraid to go after some of

13:42the,

13:43uh, most high performing agents. They, you think they have a guy, they already have their preferred

13:47lenders. And he really was like, that whole concept is crazy. He's like, I, you know, we want to work

13:53with, with new people all the time. We're, we're looking for people who can bring something new to the

13:57table. And that resonated with some of the people I talked to at lunch where they're like,

14:01you know, you kind of think, Oh, well, they're already locked up. They already have their preferred

14:04lenders. And he was like, no, you know, come and bring some value to us. We will, we will work

14:10with

14:10you. Yeah. Any real estate broker out there knows that their agents are not committed to one lender

14:17because a lot of them are trying to get them to use the lender that they are affiliated with.

14:22So, um, and not always successful. So definitely that is, um, you know, that is a key. Don't think

14:30anybody is, is tied to, to one person. And a lot of agents look for different things. So it may

14:38be

14:38that one company isn't a good fit for the loan. Um, and another company is a better one, depending on

14:45what the buyer's, um, you know, issues are or what they're looking for as well. It's not always just

14:53about interest rate. Right. I mean, it's, um, there are other, other things tied to the transaction.

14:59So that, and, um, you know, just providing the leads, um, you know, looking at transitions that are

15:08happening, people who have to buy or sell people who are motivated to buy or sell. Um, and I think

15:15that, you know, agents look for those real estate agents look for those. And as a, as a, um, lender,

15:23it's if you also will notice when things are like that are happening and providing that referral to an

15:28agent would get you that business later. So, um, there were some interesting things that came out of

15:35that for sure. I think too, you know, he really, um, made the point that like, yes, you know, the

15:40real estate agents stay in touch with their, you know, they want customers for life and all that.

15:43But in this way, if you've done their loan for them, you know, more information about what's going

15:48on. You should know more information, right. Uh, especially if you're servicing the loan, but like,

15:52um, it felt like, you know, the, the lenders are in a, in a superior position there of knowing

15:58what's happening with that person's finances. And so they can, they can spot those things and get

16:02those trigger, you know, those triggered, uh, leads easier and share them with their, with the real

16:09estate people. And also, I mean, he was really like, you know, show up with pizza. Like, so bring,

16:14bring us, you know, bring us information, but you know, uh, people who tend to think like, oh, well,

16:20you know, we're beyond the, the thing where like I, I provide, you know, whatever for the real estate

16:24office. And he was like, no, no, it's both. And I thought that was interesting because I, I tend to

16:29think of like, oh, no one, no one, that doesn't get you in the door anymore. And, um, what do

16:33I

16:34know? But he, he was like, no, that gets, that could get you in the door. Yeah. I mean, it's

16:39just

16:39being visible and providing valuable information about different mortgage products out there,

16:44like buy downs and things like that too, that agents aren't always, you know, up to speed on.

16:50Um, and they might not understand them depending on how much experience the agent has. Um, but yeah,

16:56being in front of them and providing valuable information, um, is, is vital and it, and it goes

17:02both ways as well. And, and so, you know, again, product information, just letting them know you're

17:09there, letting them know you're responsive, um, are all just simple things that can be easily done.

17:17Um, but it's just like, it's same thing on the agent side with consumers, right? A lot of

17:22lead generation and relationships can be easily done, but they aren't always done. So it mirrors

17:29that. I thought it was, um, um, it just highlighted how important our housing, our intelligence data is,

17:36because I feel like if you as a lender can see, or you as a real estate agent, it goes

17:41both ways.

17:42You can see like, here's what's happening in your market, in your very specific market,

17:45in these zip codes or at this level of, um, detail that you want as far as geographically,

17:51and you can see what's sitting on the market, what they're, what they're selling for, you know,

17:56what, uh, just all of the, the different data points that we have, then you, you are providing

18:02information to your real, uh, referral partners, both ways that they may not otherwise know that

18:07could be really great. Yeah. Especially with, um, in housing, our intelligence with the insights

18:13that are offered as well. So you can not only pull that data up, but you can get an insight,

18:18some context about it that you can share in a presentation and a conversation. Um, and I love

18:24that aspect of it. Um, you know, I follow my own area and sometimes the data is confusing and having

18:31that option to just get some context on it right away, um, is really helpful. And I think it's something

18:37that can easily be used, um, with lenders who are talking to agents.

18:42I love that. He had a lot of great, um, insights in that. Um, another thing is that he was

18:48like in

18:48this kind of market, you need to be focused on the right people. And so, you know, you have the

18:53looky loos who like kick the tires or whatever. He's like, nobody has time for that. They're not

18:58going to, you know, those are not the people who are going to be motivated in this market.

19:01So understanding their situation, understanding the products that would move them, understanding

19:07what's happening in the area that they, that they want to buy or sell in, like this becomes

19:11super important in this particular market. Yeah. And the, the thing about this market too,

19:16is there are, you know, if you look at Orlando's numbers in general, which is where I am,

19:22you know, it doesn't look great, but if you look at pockets of Orlando, they're doing really well.

19:29So it's so hyper local that having that information is, is really important and can mean the difference

19:37between, you know, getting a sale or not as well. Yeah. And also I think it was interesting, um, when

19:44he was talking about just the generational things, like the mortgage rate is not, um, is not as big

19:50a deal to somebody who's a baby boomer, for instance, and has tons of equity and they're going to be

19:55able

19:55to put enough down to get to the payment they want anyway. And they're like, I want what I want.

20:00And so I just thought it was a really interesting take. We've written it up. Um, it's on the site.

20:04So people should, uh, go look at that. It's, um, the headline of that. Let me give it to you

20:09real

20:10quick is, uh, forget waiting for lower rates. KW is Jason Abrams has a playbook for finding business

20:16anyway. And I, I did just think it was tremendous. So.

20:19Great information for both agents and lenders.

20:22Tracy, thank you so much for being on as always. Appreciate your, uh, information,

20:27all the work that your team's doing.

20:29Thank you so much. Appreciate that.

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