What’s the fastest way to erode trust between real estate agents and the general public? Tell homebuyers to drop dead. That’s essentially what data guru Jonathan Miller argues in the wake of the recently announced Compass/Redfin partnership which has put in motion the broad marketing of private and Coming Soon listings at tremendous scale.
Per Miller, “The companies announced that this new partnership gives Compass expanded exposure for its exclusive inventory, potentially adding over 500,000 listings to Redfin, while preserving limited data visibility on off-market homes.” That’s a huge number of listings that won’t display valuable information like days on market, price drops – you know, all those things that make fair market negotiations possible.
RealEstateNews reports “The Compass listings won’t include all property data, according to a Compass spokesperson, who described the deal as a ‘first-of-its kind experience.’ Days on market and price reductions will not be displayed, until and unless the seller decides to list on the open market. Those metrics, Compass has said, are ‘negative insights’ that disadvantage sellers.” These are the “very metrics that buyers and the agents who represent them need to develop a reasonable price discovery,” according to Miller.
Miller went on to compare the stripping of such metrics to “a grocery store putting food on the shelf but removing the expiration dates from the labels.” How will consumers know what to buy, or how much to pay, without the information needed to make transactions make sense?
While eighteen members of Congress work to find out how the Compass/Anywhere merger came together so quickly, a number of states have already put laws on the books to try and curb the private listing practice: Wisconsin, Washington, Illinois, and Hawaii.
As Miller notes, price discovery is essential to the entire real estate process because it helps to uphold Fair Housing, access, valuations, appraisals, competition, and negotiability.
At what point is it acceptable to put seller choice ahead of buyer risk? Once sellers become buyers, won’t they expect access to information to help them make informed decisions? As former Keller Williams CEO Gary Keller wrote in a recent opinion piece: “A seller who chooses privacy today becomes a buyer tomorrow. If they’ve bought into a system that withholds inventory in the name of exclusivity, they will face the same limitations on the other side of the transaction… an opaque market works both ways.”
We at Brown Harris Stevens believe it’s more important than ever for real estate brokerages to stand up for clients on both sides of the transaction.
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