Where We Are Now: May 12, 2020
May 12, 2020 | Source: Compass California Real Estate Blog
Work From Home — Day 57
More on Private Exclusives and Clear Cooperation
Since May 1st we have stress bubbling up in California about Clear Cooperation and Compass Private Exclusives. In my opinion, the ultimate solution will be defined by buyers and sellers, not NAR, CAR, or a local board. As a result, the ultimate solution will take some time.
To understand the dynamics, I first ask two questions:
- Who is NAR protecting?
- What was NAR’s motivation?
In my view, our client is the home buyer and home seller. We are clients of NAR, CAR, and the local boards. Please read this again and let it sink in. NAR, CAR, and the local boards work on our behalf not the reverse. Are they protecting us? I presume they feel they are indeed protecting us, real estate professionals, at large and small companies.
The challenge is they are trying to preserve a position in the marketplace based on rules, fines, etc. Market dynamics and consumer demand will redress artificial rules in a relatively short time period. The consumer will get exactly what they want!
I remember vividly July 2009, sitting at my kitchen counter writing a letter to the Marin County Board. The struggle at the time was the local MLS, not acknowledging off-MLS trades to be recorded for agent/company “credit” or comparable sales.
I drew two comparisons:
- If a quarterback in the NFL throws a touchdown pass that was not seen on “national TV” does it not count in the stats?
- If the MLS is the NASDAQ of local real estate and 15 percent of the trades are not recorded, the information source is not credible – it collapses.
Over time the MLSs realized the power of a complete set of information.
A buyer or a seller has a choice on how to buy or sell their home and they will pursue the path they desire, without regard to the local board, CAR, or NAR.
The 2019 median home price in the United States was $320,000. In California it was $605,000. Our average trade in California was above $1.5 million. I am hard pressed to believe the consumers buying/selling homes need rules around marketing practices to protect their dreams.
If all the market comparable sales are in all the available information systems, regardless of what channel they were sold through, the buyers and sellers will have the decision support they need. In addition, they have the luxury of choice of selecting a professional to represent them and further negotiating the associated fees [required by law].
In this scenario, the consumer has choices. Access to all transaction information. Personal selection of representation and fees negotiable by law. Consumer choice from my lens.
One serious competitive advantage you have in business is that you know what properties are “not available” but they are “deliverable.” Make sense? 123 Main Street is deliverable and not available on a listing service.
Never underestimate your knowledge, advice, or value to a client. They work with you because they trust you. They trust you to navigate the market and the noise.
Right now, you need to work through this noise.
This is Where We Are Now.
Mark A McLaughlin