“I want to create a national MLS to compete against local MLSs,” Robert Reffkin said, while hinting at more MLS expansions to come.
Amid an ongoing wave of regional multiple listing services expanding nationwide in partnership with the country’s largest brokerage, Compass CEO Robert Reffkin has shed light on why he’s behind the effort.
Reffkin’s remarks came days after announcements by Chicago-based MRED and Nashville’s Realtracs that the two large MLSs would begin accepting subscribers nationwide. Both said they had reached agreements with Compass to showcase the brokerage’s listings.
During his comments, which came on a call with investors after Compass announced its first quarter earnings, Reffkin made clear that Compass was behind the expansion efforts and that those efforts would continue.
“We are bringing MRED national, as well as it will be just a select number of MLSs that are pro-seller choice, where we’re going to give them all of our listings, where we’re going to subsidize our agents joining,” Reffkin said. “It’s not that I want to create a national MLS to replace local MLSs. I want to create a national MLS to compete against local MLSs.”
“If they have to compete, who are they competing for? For us. For agents,” Reffkin added. “Agents deserve more choices. Sellers deserve more choices, not less.”
Industry experts told Inman in recent days that they expect the MLS consolidation and expansion trends to accelerate in light of the announcements by MRED and Realtracs, particularly if more brokerages join Compass in the effort.
“The big are going to get bigger. The smaller ones are probably going to have to decide what’s next,” Eric Stegemann, CEO of Solid Earth, told Inman. “That might mean mergers and folding into a large organization.”
Eric Stegemann | CEO, Solid Earth
Reffkin also used Tuesday’s call to take some credit for a recent rapid shift in the policies of the country’s largest real estate search portals, who have all begun offering coming-soon listings.
“Look what we kicked off. Now, you have Zillow Previews and Realtor Previews and coming soons on all these sites,” Reffkin said.
In response to Compass’ effort to allow its agents to market their listings only on Compass.com and not widely via the MLS, then as coming-soon listings, Zillow implemented a policy banning those listings if they weren’t distributed in a place the portals could syndicate them.
In February, Compass announced that it had reached an agreement with Rocket Companies to display its pre-marketed listings on Redfin before those listings were distributed via the MLS. Three weeks later, Zillow announced that it would also display coming-soon listings.
“Didn’t the seller deserve that five years ago and 10 years ago? Why didn’t they have it? Shouldn’t sellers have more choices, not less choices?” Reffkin said. “We’re pushing on the system so that sellers and agents have more choices, less mandates.”
“The seller should be the only person who decides how they market their home in the context of the law, and fiduciary duty and statutory duty,” Reffkin said. “MLS rules are just rules of a business; they’re private entities.”
Changes in 3-Phased marketing
During the call, Reffkin also shared recent updates on shifts in Compass agents using the brokerage’s pre-marketing strategy, which it calls 3-Phased Marketing.
Reffkin said the Zillow policy significantly dampened the number of Compass listings that were pre-marketed, but that the share was growing in the wake of the partnership with Redfin and MLS shifts in favor of coming-soon listings.
“We’ve seen an uptick in the three-phased marketing. It’s been modest as you’re in the middle of the spring market when usually it’s more towards the third phase, but we’ve definitely seen an increase,” Reffkin said. “Our coming soons went from I think it was low 20s to mid-30s, and I expect it to be much higher in the months ahead.”
“My expectation is that 80 percent of our listings will go through the coming-soon phase. The expectation comes from where — before the restrictive rules that were put in place, Clear Cooperation — we had 90 percent of our listings start off as coming soons.”
Most of those listings eventually reached the third phase of marketing, meaning widespread distribution via the MLS, according to past data shared by the company.
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