Latest / Dishin' Dirt with Gary Pickren / The Shadow MLS Is Here: Compass + Rocket + Redfin Just Declared War on the Open Market

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The Shadow MLS Is Here: Compass + Rocket + Redfin Just Declared War on the Open Market · Dishin' Dirt with Gary Pickren

0:02
SPEAKER_00: This is Dish and Dirt with Gary Pickering, South Carolina's only podcast dedicated to the real estate agent craft.
0:10
SPEAKER_00: And now the host of Dish and Dirt.
0:12
SPEAKER_00: And Greens, and welcome back, everyone, to another episode of Dish and Dirt.
0:14
SPEAKER_00: I'm your often opinionated but rarely wrong host, Gary Pickering, coming to you from the beautiful downtown Columbia, South Carolina offices of Blair, Cato, Picker, and Castellan, this, the second week of March 2026.
0:24
SPEAKER_00: Today we are talking about something that could fundamentally reshape the entire real estate industry.
0:30
SPEAKER_00: And I know I'm not talking about the Sitzer Burnett case again, but it is something that could be as huge in reshaping this entire industry as the Sitzer Burnett case was.
0:39
SPEAKER_00: Of course, I'm talking about Compass, Rocket Mortgage, and Redfin and how they just struck a deal that has the entire real estate industry arguing amongst itself.
0:48
SPEAKER_00: Some people say that this deal is innovative.
0:50
SPEAKER_00: Others say it is an absolute outright assault on the multiple listing service and the open market.
0:55
SPEAKER_00: I personally am calling it a fair housing and antitrust perfect storm, probably a perfect storm we haven't seen since George Clooney skippered the Andrea Gale.
1:03
SPEAKER_00: One of the loudest critics of this entire deal is Jason Oppenheim.
1:07
SPEAKER_00: Of course, you probably know Jason from Selling Sunset on Netflix.
1:10
SPEAKER_00: He says compass is weaponizing secrecy.
1:13
SPEAKER_00: So today we're going to break it down.
1:15
SPEAKER_00: What is actually in this deal?
1:17
SPEAKER_00: Why does this deal matter to you as a real estate agent here in South Carolina?
1:21
SPEAKER_00: Why are some agents loving it?
1:22
SPEAKER_00: Why are other agents saying this is one of the most dangerous deals they've ever seen?
1:27
SPEAKER_00: But most importantly, what could it mean for the future of how homes are marketed in the United States?
1:33
SPEAKER_00: So let's start with the basics.
1:34
SPEAKER_00: Compass, Rocket Companies, and Redfin has announced a three-year strategic alliance that changes how listings reach consumers.
1:42
SPEAKER_00: At its core, this alliance is between three different types of companies that sit at different parts of this real estate transaction.
1:50
SPEAKER_00: So you have Compass, that's the brokerage that controls listing inventory.
1:53
SPEAKER_00: You have Redfin, that's the consumer search portal where buyers look for homes.
1:58
SPEAKER_00: Thirdly, you have Rocket, that's the mortgage platform that finances the purchases.
2:02
SPEAKER_00: And the goal is to try to connect these three things into one single real estate ecosystem.
2:08
SPEAKER_00: So let's look at it step by step.
2:10
SPEAKER_00: The first piece of this deal is the listings.
2:13
SPEAKER_00: Compass is going to syndicate its coming soon listings directly to Redfin by passing the multiple listing service.
2:21
SPEAKER_00: Eventually, it's also going to send the private exclusive listings that we've talked about, ad nauseum here on Dish and Dirt, to Redfin as well.
2:28
SPEAKER_00: So coming soon and private exclusives going directly to Redfin.
2:31
SPEAKER_00: Now, historically, those listings only lived in two places: Compass.com.
2:35
SPEAKER_00: It's an inside the Compass Agent Network and the Multiple Listing Service.
2:39
SPEAKER_00: But this deal changes that.
2:40
SPEAKER_00: These listings now appear on Redfin before they ever hit the multiple listing service.
2:46
SPEAKER_00: And this isn't a small number of houses.
2:48
SPEAKER_00: What we're talking about is the company said the arrangement could bring as many as half a million additional listings to the Redfin platform.
2:57
SPEAKER_00: That's the inventory piece.
2:58
SPEAKER_00: The second piece of this deal is consumer attention.
3:01
SPEAKER_00: Redfin gets massive, massive traffic on their platform.
3:06
SPEAKER_00: Now these listings that Compass has will be visible to tens of millions of Redfin users before they go to the public.
3:13
SPEAKER_00: Redfin itself gets around 60 million users a month, which is over 2 billion visits a year.
3:21
SPEAKER_00: Millions of buyers we know are searching Redfin every year, looking for homes, and Compass will list those inside that search experience.
3:30
SPEAKER_00: But the major difference here compared to the traditional multiple listing service listing is that these listings will not show and will not include clear needed key data fields.
3:40
SPEAKER_00: For example, ASOMART will not appear.
3:43
SPEAKER_00: Price drop history will not appear.
3:45
SPEAKER_00: Automated home value estimates will not appear.
3:48
SPEAKER_00: Buyers will see the house, but they don't get to see the traditional pricing signals that normally come with an MLS listing.
3:54
SPEAKER_00: And that is, whether you like it or not, the central feature to this agreement.
3:59
SPEAKER_00: The third piece of the structure is lead generation.
4:02
SPEAKER_00: When buyers click those listings on Redfin's platform, those inquiries are going to be rerouted to Compass agents.
4:09
SPEAKER_00: Over the life of the partnership, Compass agents are expected to receive more than one million buyer inquiries that will be generated through the RedFIM platform.
4:16
SPEAKER_00: I'm sure RedFin agents are loving to hear that.
4:18
SPEAKER_00: That's not a coincidence, it's called a pipeline.
4:20
SPEAKER_00: The search happens on RedFin, but the agent relationship's going to happen through COMPAS.
4:24
SPEAKER_00: The fourth piece of this deal is mortgage, mortgage steering, that is.
4:28
SPEAKER_00: Rocket Mortgage will integrate its financial products into the system.
4:32
SPEAKER_00: Buyers working with COMPAS agents are allegedly going to receive certain incentives.
4:36
SPEAKER_00: Those incentives are, of course, labeled as mortgage rate discounts and up to$6,000 in lender credit, which, of course, you weren't born yesterday, so that you know that any mortgage discount, supposed discount, or lender credits will be charged to the borrower in loan pricing somehow.
4:54
SPEAKER_00: They're not giving them anything for free.
4:56
SPEAKER_00: This sounds a lot like the lawsuits that we've already seen against Rocket and against Zillow for mortgage steering.
5:02
SPEAKER_00: Rocket's also, however, going to integrate its mortgage system directly into Compass's technology platform.
5:09
SPEAKER_00: So you see all of these financial ties are going to be embedded directly into brokerage workflow.
5:16
SPEAKER_00: At the same time, we're having lawsuits over this exact thing.
5:20
SPEAKER_00: The next phase is you're going to put all this together and the structure is going to look like this.
5:23
SPEAKER_00: Buyer searches for homes on Redfin, buyer clicks a listing that's owned by a Compass agent, lead goes directly to the Compass agent, buyer gets his mortgage incentives directly through Rocket, and the entire transaction happens inside the same real estate ecosystem.
5:38
SPEAKER_00: Search, agent, mortgage, all connected.
5:40
SPEAKER_00: But there's a hidden financial layer behind this structure that's very easy to miss.
5:45
SPEAKER_00: Rocket reportedly pays Compass to integrate Rocket's mortgage inside Compass's technology platform.
5:53
SPEAKER_00: There's your financial tie that's subject to these lawsuits for the mortgage steering.
5:57
SPEAKER_00: And this looks exactly like what they're being sued for.
6:00
SPEAKER_00: And Compass agents may pay Rocket for certain lead opportunities.
6:04
SPEAKER_00: So there's multiple revenue streams that are going to be moving back and forth between the companies on mortgage volume, lead generation, consumer traffic, listing inventories.
6:13
SPEAKER_00: This isn't just a marketing partnership.
6:15
SPEAKER_00: This is an integrated business model that is literally what people are being sued for right now.
6:21
SPEAKER_00: The strategic goal, when you step back and look at it, it's pretty obvious.
6:24
SPEAKER_00: Each company contributes a piece it controls best.
6:26
SPEAKER_00: Compness is going to bring the listings, Redfin's going to bring the consumer search traffic, Rocket's going to bring the financing, and together they're going to build this into something that looks very similar to what Zillow was trying to do over the past few years.
6:37
SPEAKER_00: It's a full-stacked housing platform.
6:40
SPEAKER_00: Home buying process happens entirely inside this entire ecosystem.
6:44
SPEAKER_00: Search the house, meet the agent, get the mortgage, close the deal, all without leaving the platform.
6:48
SPEAKER_00: Why does this matter to the industry?
6:49
SPEAKER_00: And why is this deal getting so much attention?
6:51
SPEAKER_00: Because for decades, the multiple listing service has set in the middle of the housing transaction.
6:56
SPEAKER_00: Every listing flowed through the MLS, every brokerage relied on the MLS, the deal create, this deal now creates a new pathway.
7:03
SPEAKER_00: Listings can be moved from a brokerage directly to a portal without the MLS ever being the central distribution point, which also means distribution is extremely limited, as if that's somehow good for your seller.
7:14
SPEAKER_00: And if enough listings start taking this path, the structure of the real estate marketplace could change in a pretty significant way.
7:22
SPEAKER_00: To understand this deal better, I think you have to understand Compass's marketing model.
7:27
SPEAKER_00: Compass has been pushing something they call a three-phase marketing strategy, which I think I have very effectively exposed as a farce on dirt in previous episodes.
7:36
SPEAKER_00: In one section of their previous marketing piece, Compass touted how the seller could get maximum dollars because of the limited exposure to the network of people that they know are most qualified to buy houses.
7:48
SPEAKER_00: Then in the same marketing piece, there was a section for buyers where it said buyers could save thousands of dollars because you wouldn't get into a building war with other people looking at these houses.
7:57
SPEAKER_00: So basically, because we have limited people in here, the price is going to be high, but because we have limited people, you'll get a great deal for a low price.
8:05
SPEAKER_00: Both can't be true.
8:06
SPEAKER_00: So I noticed the hypocrisy and spoke out about it.
8:09
SPEAKER_00: And I noticed now that page has since come down.
8:11
SPEAKER_00: I'd like to say it's because of dish and dirt.
8:12
SPEAKER_00: I doubt that.
8:13
SPEAKER_00: I'm sure other people in the industry also were pointing out the stupidity of the marketing piece.
8:18
SPEAKER_00: But overall, it goes like this.
8:19
SPEAKER_00: You have phase one, which is private exclusives.
8:22
SPEAKER_00: This is the listing is visible only to compass agents and clients.
8:25
SPEAKER_00: They claim it's for various reasons.
8:27
SPEAKER_00: We know it, so they can try to get both sides of the transaction.
8:30
SPEAKER_00: Number two is coming soon.
8:31
SPEAKER_00: The home gets broader visibility, but still isn't fully visible to the public.
8:35
SPEAKER_00: Again, so they can try to control the listing and try to get both sides, hoping the other side doesn't have an agent yet.
8:40
SPEAKER_00: And then finally it goes on the public listing to the multiple listing in the third and final phase.
8:45
SPEAKER_00: Compass argues this approach helps the sellers test pricing and build anticipation before you ever go to the public.
8:52
SPEAKER_00: Because we all know that every time you do a listing presentation, your seller says, hey, I want to slow down.
8:57
SPEAKER_00: I want to test the price, I want to build anticipation.
9:00
SPEAKER_00: I don't really want you to sell the house.
9:02
SPEAKER_00: I don't want you to move forward.
9:03
SPEAKER_00: I really just want to put it out there to a couple of people and see what the price really is.
9:06
SPEAKER_00: Because we know that happens with every one of your listings.
9:08
SPEAKER_00: Critics actually say something different and actually smarter that this model restricts exposure, which could hurt sellers.
9:15
SPEAKER_00: Now, the word could should be changed to will absolutely hurt sellers.
9:19
SPEAKER_00: And that's where this red fin deal comes in because now COMPAS can take the listing, skip the multiple listing service, still put it in front of millions of buyers, which by the way, incidentally, I think kind of proves the whole Compass argument about seller privacy to be complete bullshit in the first place.
9:34
SPEAKER_00: Talk more about that later.
9:36
SPEAKER_00: But this effectively creates a parallel distribution system for its listings.
9:41
SPEAKER_00: What some people are calling this is a shadow MLS.
9:44
SPEAKER_00: So let's look at their motivation a little bit more in detail.
9:46
SPEAKER_00: You have to look at their broader strategy at Compass.
9:49
SPEAKER_00: Over the last few years, Compass has been on this massive expansion run.
9:52
SPEAKER_00: They've acquired the Anywhere real estate brands, which is Colwell Bankers, C21, ERA, Sotheby's, uh, Corcoran, at properties, and they've all acquired this into their ecosystem.
10:02
SPEAKER_00: And that dramatically expands their inventory pipeline.
10:06
SPEAKER_00: Now, when you combine this with this Redfin partnership, Slint suddenly has now the ability to control listings, control leads, and control the consumer experience.
10:14
SPEAKER_00: Because Redfin buyers clicking on these listings, those leads go back to Compass agents, and that's the key.
10:21
SPEAKER_00: Nothing to do here has to do with seller choice, as they've constantly claimed over the last year.
10:26
SPEAKER_00: It has everything to do with protecting those leads and making sure that Compass gets as many two-sided deals as possible.
10:34
SPEAKER_00: The partnership, according to Compass, is going to generate more than a million buyer inquiries for Compass agents over the life of the deal, which is a huge number.
10:41
SPEAKER_00: And Rocket Mortgage is also, as we know, part of that equation.
10:44
SPEAKER_00: End-to-end real estate ecosystem, which has already resulted, by the way, in two major lawsuits, which could end up being bigger than Sister Burnett, is what we are looking at.
10:53
SPEAKER_00: And it also looks very suspiciously like a direct attempt to try to beat out Zillow at its own game.
10:59
SPEAKER_00: I need to backtrack here for a second with a little piece of historical information about real estate.
11:04
SPEAKER_00: Because to understand why this compensed redfin deal has people losing their minds, I think you need to understand why the MLS exists in the first place.
11:11
SPEAKER_00: Go back a hundred years ago, real estate didn't really work the way it works today.
11:15
SPEAKER_00: It was full of fraud and all kinds of inconsistencies.
11:18
SPEAKER_00: There was no MLS, there was no Zillow or Redfin, there was just real estate agents.
11:22
SPEAKER_00: And agents had listings.
11:23
SPEAKER_00: And if you wanted to know what homes were for sale, you had to know the right agent.
11:27
SPEAKER_00: Those listings were controlled through what people called listing clubs, and agents would literally meet together and share with agents they liked what they had for sale.
11:36
SPEAKER_00: And if they didn't like you, you weren't part of their listing club, you didn't get any of them.
11:39
SPEAKER_00: And that was a catch.
11:40
SPEAKER_00: They didn't share everything.
11:42
SPEAKER_00: They would hold back listings, they would only tell certain buyers that they wanted to tell, and they would only sell properties quietly within their own network.
11:49
SPEAKER_00: That sounds kind of familiar to you, kind of sounds like what we're talking about here.
11:52
SPEAKER_00: Eventually, the industry realized something very important about this system.
11:56
SPEAKER_00: If every agent shared their listings with every other agent instead of only a third of the market, everyone could sell more homes.
12:03
SPEAKER_00: I think that's without doubt.
12:04
SPEAKER_00: Buyers would see more properties, without doubt, and sellers would get more exposure, which, believe it or not, would result in sellers making more money.
12:13
SPEAKER_00: So therefore, you would comply with your fiduci duties.
12:15
SPEAKER_00: And those agents could cooperate on deals, and the industry created something revolutionary at that point, the multiple listing service.
12:22
SPEAKER_00: The idea was very simple.
12:23
SPEAKER_00: Instead of each brokerage controlling its own inventory, everyone would contribute that inventory to a shared marketplace.
12:30
SPEAKER_00: And in return, everyone would have access to everyone's listings at exactly the same time.
12:35
SPEAKER_00: It created transparency, it created cooperation.
12:38
SPEAKER_00: And for decades, this system has been the very backbone of the housing market for the United States.
12:43
SPEAKER_00: Now, fast forward to today.
12:44
SPEAKER_00: Certainly technology like AI is changing everything.
12:47
SPEAKER_00: And we have portals like Zillow and Redfin that now sit between the consumers and the MLS.
12:51
SPEAKER_00: And I'm not here arguing on behalf of MLS.
12:53
SPEAKER_00: I don't think it's a perfect system, but it does have a lot of wonderful qualities when you look at it.
12:57
SPEAKER_00: Brokerages are bigger now and they're more powerful now than they've ever been because of their all continuing to consolidate.
13:03
SPEAKER_00: And some of these companies now are starting to ask the questions that really would have been unthinkable 20 years ago.
13:08
SPEAKER_00: And that question is, what if we didn't have an MLS at all?
13:12
SPEAKER_00: And that's really where we're sitting at the center of this Compass redfin rocket deal, because what Compass is attempting to do isn't just a marketing experiment, it's potentially the biggest challenge to the multiple listing service system that we've seen in decades.
13:24
SPEAKER_00: And depending on who you ask, it's either the future of real estate or it's the beginning of a very messy industry-wide war, which I think we're in the middle of a Cold War now, and I think this is going to make it even worse.
13:36
SPEAKER_00: So today what we're going to do is break down what exactly has happened, why it matters, and why we're fighting over these listings and how they could reshape the entire housing market.
13:44
SPEAKER_00: Let's start with why some people like the deal.
13:47
SPEAKER_00: I'll try to do my best to be fair here.
13:49
SPEAKER_00: It's very hard.
13:50
SPEAKER_00: Because not everyone hates this deal.
13:52
SPEAKER_00: I mean, people who work at Compass, I guess, like it.
13:54
SPEAKER_00: And those agents obviously think this is exactly what the industry needs.
13:57
SPEAKER_00: Supporters argue that the MLS system is outdated.
14:00
SPEAKER_00: I don't disagree with that at 10 degree.
14:01
SPEAKER_00: But with Sitcher, we've already made some very wonderful changes to the multiple listing system.
14:06
SPEAKER_00: Those same agents say it restricts how agents and sellers can market homes.
14:09
SPEAKER_00: Well, you got to have rules.
14:10
SPEAKER_00: I mean, I know that sounds crazy, but you know what also restricts how we market homes?
14:14
SPEAKER_00: I don't know, federal law, state law, your fiduciary duty to your client, your code of ethics at the Ruler Association.
14:21
SPEAKER_00: So we already have all kinds of restrictions on how we can market and sell homes.
14:26
SPEAKER_00: But Robert Refkin, who is compass the CEO, says the deal represents the end of restrictions that MLS have had on agents and sellers for years.
14:33
SPEAKER_00: Okay, well, so what?
14:35
SPEAKER_00: You have to be able to restrict on how people do it so that people follow the rules and follow the walls.
14:39
SPEAKER_00: I mean, I don't even know what restrictions he's talking about.
14:41
SPEAKER_00: Maybe he means like stopping pocket listings or ensuring access to all buyers, regardless of race, color, and ethnicity.
14:47
SPEAKER_00: This pitch they're doing to sellers is pretty powerful because it's not really telling them the whole truth.
14:51
SPEAKER_00: What COMPAS says they can do is protect negotiating leverage.
14:55
SPEAKER_00: That's bullshit.
14:56
SPEAKER_00: You can't not tell people what they need to know about the property.
15:01
SPEAKER_00: I mean, that's why we have certain disclosures.
15:03
SPEAKER_00: It says it avoids negative data points.
15:06
SPEAKER_00: That's the opposite of transparency, guys.
15:08
SPEAKER_00: We're now trying to get into when we have a whole era of lawsuits about transparency.
15:13
SPEAKER_00: Now, what we're going to do is try to hide negative data points.
15:16
SPEAKER_00: I mean, while we're at it, let's just hide the seller disclosure.
15:19
SPEAKER_00: Let's just get rid of seller disclosure, go back to buyer beware, and you be exposed to whatever the seller didn't want to tell you about.
15:25
SPEAKER_00: And also, they also say it allows you to test pricing before you go public.
15:28
SPEAKER_00: I don't know who is testing pricing.
15:30
SPEAKER_00: That's absurd.
15:31
SPEAKER_00: That is the most absurd argument I've ever heard.
15:33
SPEAKER_00: It's almost like that was put into chat and somebody told them to use that as an argument.
15:37
SPEAKER_00: They argue that days on market and price reduction hurts sellers.
15:41
SPEAKER_00: But as I said, so do seller disclosures.
15:43
SPEAKER_00: But we didn't get rid of that.
15:44
SPEAKER_00: Days on market is a fact.
15:46
SPEAKER_00: You can't hide the fact.
15:47
SPEAKER_00: And whether you put days on market on Zillow or not, it's still a day on market.
15:52
SPEAKER_00: Once you start advertising the house for sale to the public, guess what that is?
15:57
SPEAKER_00: A day on market.
15:58
SPEAKER_00: That's why the multiple listing service puts it there.
16:00
SPEAKER_00: It doesn't matter what your ideas are, what your thoughts are, whether we should expose that or not.
16:05
SPEAKER_00: A day on market is a day on market.
16:07
SPEAKER_00: The day you're starting to advertise a property is a day it's been on the market.
16:10
SPEAKER_00: And that's where people have been playing loose with these rules for years, taking it off and putting it back on and trying to claim, oh, it's brand new on the market.
16:16
SPEAKER_00: No, it's been on the market for six months.
16:18
SPEAKER_00: You took it off for two weeks.
16:19
SPEAKER_00: Does not make it the days of market simply disappear.
16:22
SPEAKER_00: So their idea was simple.
16:23
SPEAKER_00: Let's just don't show them.
16:24
SPEAKER_00: In this age of lawsuits of transparency, we're going to take a huge step backwards.
16:28
SPEAKER_00: We're going to hide or even lie or obfuscate about days on market.
16:32
SPEAKER_00: But the days on market, as I said, start the days you offer the property for sale.
16:36
SPEAKER_00: Period.
16:37
SPEAKER_00: So instead, what we're trying to do now is to hell with transparency, we're going to simply just try to control the narrative.
16:43
SPEAKER_00: And supporters say this flexibility will encourage more sellers to list homes.
16:47
SPEAKER_00: Saying something doesn't make it true.
16:49
SPEAKER_00: How does that increase the housing supply?
16:51
SPEAKER_00: It's all about gaslighting you and convincing you that this is a good idea when it's not, which is the real issue right now.
16:57
SPEAKER_00: So the pro-COMPAS argument is basically the MLS is outdated.
17:01
SPEAKER_00: Don't disagree that this is innovation.
17:03
SPEAKER_00: It is innovation, but it doesn't mean it's good innovation.
17:06
SPEAKER_00: It's basically an attempt to get both sides of the transaction, even if it's not in the best interest of your seller.
17:11
SPEAKER_00: And they all wrap this up in obfuscation, obfuscation, have truths.
17:15
SPEAKER_00: Let me, in fact, use this time now to address these main arguments for this private listing network, the privacy argument.
17:22
SPEAKER_00: And why this, let's talk about this and why this falls apart.
17:24
SPEAKER_00: One of the central arguments that Compass's CEO Refkin has been making for years is that private listing exists for consumer privacy.
17:32
SPEAKER_00: And on the surface, that actually sounds somewhat reasonable.
17:35
SPEAKER_00: Argument goes like this some sellers don't want their house homes to be blanketed across the internet.
17:39
SPEAKER_00: Maybe they're high profile, maybe they're going through a divorce, maybe they just don't want strangers studying their floor plan of their housing.
17:46
SPEAKER_00: Okay, that was the original pitch behind Compass's private exclusives.
17:49
SPEAKER_00: The idea was that these listings would stay with a smaller, controlled network to protect the seller's privacy.
17:55
SPEAKER_00: But here's the problem with that argument now.
17:57
SPEAKER_00: It falls completely apart when you look at the new Redfin deal.
18:00
SPEAKER_00: Because the goal, if it was privacy, why would you put the listing on the website that gets nearly 2 billion visits a year?
18:08
SPEAKER_00: That's not privacy.
18:09
SPEAKER_00: That is selective transparency.
18:12
SPEAKER_00: It's a huge difference.
18:13
SPEAKER_00: And when a property is visible to an internal network of hundreds of thousands of agents and then published on a massive consumer portal like Redfin, that listing is not private.
18:24
SPEAKER_00: It's just not on MLS.
18:25
SPEAKER_00: Those are two things, but not the same things.
18:28
SPEAKER_00: The Internet also remembers everything.
18:30
SPEAKER_00: Another issue critics point out is that the data shield that Compass is promising sellers doesn't even actually exist because Compass says hiding things like days on market and price drop histories protects the seller's negotiating leverage.
18:42
SPEAKER_00: But here's the reality: the internet is extremely good at remembering things.
18:46
SPEAKER_00: We find out crap that politicians say 10, 15 years ago.
18:49
SPEAKER_00: If a listing appears on Redfin today and then drops in price two weeks later, there are already dozens of tech tools and data scrapers that will track those changes.
18:58
SPEAKER_00: And within days, I guarantee you, someone is going to become a millionaire because they're going to create a tracker that logs when a listing first appeared on Zillow, Redfin, the multiple listing servers, and how the price has moved.
19:11
SPEAKER_00: So the idea that this is going to somehow create some permanent privacy shield and hide days on market, which is crap anyway, is not reality.
19:19
SPEAKER_00: Let's talk about their pre-marketing argument.
19:22
SPEAKER_00: So another one of my favorite compass arguments here.
19:24
SPEAKER_00: They say that sellers need time to prepare their homes before their clock starts ticking on days in the market.
19:29
SPEAKER_00: Well, maybe the house needs painting.
19:31
SPEAKER_00: Sure, maybe they need to do some staging.
19:33
SPEAKER_00: Again, on the surface, that might sound reasonable.
19:35
SPEAKER_00: But here's the point that the critics point out.
19:37
SPEAKER_00: The MLS already has solutions for that.
19:38
SPEAKER_00: It's called the coming soon or withhold from listing status.
19:42
SPEAKER_00: And this allows you to go ahead and start preparing the house without accumulating days on market because the house isn't available to the market.
19:48
SPEAKER_00: But guess what?
19:49
SPEAKER_00: When you put the house on the market, MLS isn't just a market.
19:52
SPEAKER_00: If you put it on Zillow or you put it on Redfin, that's a day on market.
19:55
SPEAKER_00: So this has less to do with seller protection and has a lot more to do with control of the listing inventory.
20:01
SPEAKER_00: The seller choice arguments, the idea is that sellers have the freedom to decide how to market their home.
20:06
SPEAKER_00: Well, again, that sounds perfectly reasonable.
20:08
SPEAKER_00: Every seller should have that right.
20:09
SPEAKER_00: But critics want to point out that the seller's choice only works if a seller fully understands what the trade-offs are.
20:16
SPEAKER_00: Because when you take a property off the multiple listing service, you're not just hiding data, potentially reducing exposure to the broader marketplace.
20:24
SPEAKER_00: And historically, broader exposure produces higher prices.
20:28
SPEAKER_00: So the question becomes: is the seller choosing this strategy because it truly benefits them, or is this because that system has been created by the brokerage and they're encouraging it because of their financial benefit?
20:40
SPEAKER_00: As I mentioned earlier, Jason Oppenheimer said that this is basically a shadow MLS because buyers are kept in the dark about properties, competing brokerages are losing inventory, and COMPASS is benefiting all of that financially.
20:53
SPEAKER_00: His argument is that COMPASS is weaponizing information, and his other big concern is fair housing.
20:59
SPEAKER_00: So let's talk about fair housing because this is where I think this whole problem exists.
21:03
SPEAKER_00: Historically, the MLS has democracized access to listings.
21:07
SPEAKER_00: Before we had the MLS system, homes were sold through these Whisper networks, as we talked about.
21:12
SPEAKER_00: And agents would tell their preferred clients and other buyers never knew a house even existed.
21:17
SPEAKER_00: And critics argued that these private listings created that system.
21:20
SPEAKER_00: It disproportionately hurt first-time home buyers, minority home buyers, and out-of-town buyers because they were less connected to the insider network, which controlled these housing.
21:30
SPEAKER_00: And economists and housing advocates say these pocket listings systematically exclude buyers who aren't plugged in to elite agent networks.
21:38
SPEAKER_00: That's why many industry leaders believe that transparency is critical for fair housing.
21:44
SPEAKER_00: And that's why this deal is raising such eyebrows.
21:47
SPEAKER_00: And that's why I think any administration is going to have to put a stop to this.
21:50
SPEAKER_00: But there's also the broader power struggle that's happening here.
21:53
SPEAKER_00: For decades, the MLS has been a central database for real estate, but today three major forces are fighting to control.
22:00
SPEAKER_00: The listings, the MLS, portals like Zillow and Redfin and the individual brokerages.
22:04
SPEAKER_00: And whoever controls the listing controls the consumer.
22:07
SPEAKER_00: That's what it's all about, guys.
22:08
SPEAKER_00: It's all about control, which control relates into money.
22:12
SPEAKER_00: Compass appears to be making this bold bet.
22:14
SPEAKER_00: Instead of relying on the MLS, they're going to build their own ecosystem, the brokerage plus the portal plus the mortgage.
22:20
SPEAKER_00: And that's why some analysts say this deal is a direct strike against traditional real estate infrastructure, which is fine.
22:26
SPEAKER_00: I'm fine for innovation, but I just cannot wait for these lawsuits to follow.
22:30
SPEAKER_00: We already got two of these lawsuits already.
22:32
SPEAKER_00: And Revkin somehow thinks he's going to thread this needle in the next catch mark is not going to file the class action lawsuit.
22:39
SPEAKER_00: At the exact same time, we have two lawsuits that have already been filed by the Morella lawyers who are about ready to make these into class actions.
22:45
SPEAKER_00: So there's also this legal question we have to look at.
22:48
SPEAKER_00: Agents have a fiduci duty, and that job is to get the sellers the highest price possible, the best deal.
22:55
SPEAKER_00: Research has consistently showed that when you limit exposure, you reduce sales price.
23:01
SPEAKER_00: Critics have argued that steering sellers away from the open market creates conflicts of interest.
23:07
SPEAKER_00: No kidding.
23:08
SPEAKER_00: When the broker benefits by controlling the buyer, controlling the lead, controlling both sides of the deal, it's called double ending.
23:15
SPEAKER_00: Now you add the steering of the mortgage involved in this.
23:18
SPEAKER_00: That's where your legislatures, your regulators, and your antitrust lawyers are going to start asking questions.
23:22
SPEAKER_00: So what does this mean for the future?
23:24
SPEAKER_00: What happens next?
23:25
SPEAKER_00: Well, here's some possible scenarios.
23:26
SPEAKER_00: One is nothing changed.
23:27
SPEAKER_00: MLS remains dominant.
23:28
SPEAKER_00: None of this really matters.
23:30
SPEAKER_00: I don't think that's going to happen.
23:31
SPEAKER_00: Number two, we're going to have multiple competing listing ecosystems in real estate.
23:35
SPEAKER_00: Compass plus Redfin plus Rocket.
23:37
SPEAKER_00: Zillow will then go out and build its own network.
23:40
SPEAKER_00: Brokerages will start merging together and create a private inventory.
23:43
SPEAKER_00: And I wonder if Refkin even thought about what happens if everybody else partners into a Zillow model.
23:50
SPEAKER_00: So you've got a Redfin model and a Zillow model, and his agents don't have access to the Zillow.
23:55
SPEAKER_00: You can't possibly sit here as Refkin and think that the rest of the market, the EXPs of the world, the Keller Williams and the Remax of the world, are just going to sit there and let Compass and anywhere create this private listing network, do it themselves and exclude everybody else from it and not have the inverse happen.
24:14
SPEAKER_00: I mean, those three brokerages themselves will go get with somebody like a Zillow, create their own, and exclude Compass.
24:19
SPEAKER_00: That's what's going to happen.
24:20
SPEAKER_00: His agents protect themselves on what 30%, 40% of those listings and lose out on 50 or 60%.
24:26
SPEAKER_00: Zillow will build its own network.
24:28
SPEAKER_00: We know this will happen.
24:30
SPEAKER_00: The third possibility is regulators should stop in and say, enough with this nonsense.
24:34
SPEAKER_00: And the industry is already under heavy enough scrutiny as it is because of these commission lawsuits and these uh mortgage steering lawsuits.
24:40
SPEAKER_00: Now you start adding data monopolies and private inventory monopolies and networks, that's going to attract attention.
24:46
SPEAKER_00: In fact, we already know it has attracted attention.
24:49
SPEAKER_00: For the most part, what we've already seen is that regulators don't care about your brokerage strategy.
24:55
SPEAKER_00: What they care about is protecting the consumer.
24:57
SPEAKER_00: And they're going to start asking these questions.
24:59
SPEAKER_00: And that's a real simple question.
25:01
SPEAKER_00: Are private listing networks violating fiduciary duties?
25:05
SPEAKER_00: Now remember, the fiduciary duty is a foundation of agency law in real estate.
25:09
SPEAKER_00: If you don't have the fiduciary duty, there's no reason to have agency.
25:12
SPEAKER_00: You don't have agency, then you become nothing more than an order taker.
25:15
SPEAKER_00: Agents have that legal obligation to act in the best financial interest of their client.
25:20
SPEAKER_00: And for sellers, that typically means exposing their properties to the largest possible pool of buyers.
25:26
SPEAKER_00: Because the more buyers that see the house, the more competition you get, the more competition you get, prices go higher.
25:33
SPEAKER_00: When brokers, brokerages start encouraging listings to stay off the open market, regulators are going to start asking these very uncomfortable questions.
25:41
SPEAKER_00: Is this actually in the seller's best interest?
25:44
SPEAKER_00: Or is it in the brokerage's best interest?
25:46
SPEAKER_00: We know the answer to that.
25:48
SPEAKER_00: And several states, believe it or not, have already started paying attention to this issue.
25:51
SPEAKER_00: According to Housing Wire, states have always had the authority to regulate how real estate is marketed.
25:57
SPEAKER_00: And the constitutional label for this is called policing power, the state's broad ability to govern the conduct of licensed professions in the name of consumer protection.
26:06
SPEAKER_00: And that authority far more expansive than anyone might even realize.
26:10
SPEAKER_00: We've seen Washington, Wisconsin, Connecticut, Hawaii, Illinois all either passing laws or in the process of passing laws that deal with transparency aspect.
26:22
SPEAKER_00: And they're all looking for the stricter approach of prohibiting marketing to limited or exclusive groups without concurrent public exposure, with only very, very narrow safety exceptions and with signed authorization.
26:36
SPEAKER_00: When it comes to these things, when you're talking about fair housing, buyer disadvantage, fiduci obligations to seller, that's when the regulation, regulators aren't going to sit here and say nothing.
26:45
SPEAKER_00: They're not necessarily going to ban these networks outright, but they're going to start asking these questions to make sure the seller fully understands what they're giving up.
26:52
SPEAKER_00: They're going to make sure that the agent fully explains the limiting exposure and how that's going to reduce the number of buyers.
26:58
SPEAKER_00: And did the brokerage have a financial incentive in trying to keep that listing inside its own network?
27:03
SPEAKER_00: And that's exactly what they're doing.
27:04
SPEAKER_00: It's all for financial interest.
27:06
SPEAKER_00: Don't kid yourself in thinking it's something else.
27:08
SPEAKER_00: And if the answer to these questions start leaning in the wrong way, that's when things start turning into disciplinary action and class lawsuits.
27:15
SPEAKER_00: And that's the part where it can get really interesting.
27:17
SPEAKER_00: If private listing networks expand nationally, this may not just become an MLS debate.
27:23
SPEAKER_00: It becomes a state regulatory issue because MLS write rules, but state regulators regulate license.
27:29
SPEAKER_00: And those commissions have the authority to discipline agents if they believe fiduciar.
27:35
SPEAKER_00: And so when we talk about this compass redfin deal, this isn't just a business strategy.
27:39
SPEAKER_00: It also could become a legal and regulatory story in the next few years.
27:42
SPEAKER_00: Now there's one other part I want to talk about that's one of the most important parts of this whole story.
27:47
SPEAKER_00: And it's something a lot of people in the industry haven't fully connected yet.
27:50
SPEAKER_00: The whole strategy here isn't just about listings, it's also about recruiting agents.
27:54
SPEAKER_00: And I think this is where the antitrust issue comes in.
27:57
SPEAKER_00: Because if you're Robert Refkin and you're trying to grow compass into this dominant brokerage in the United States, you need a way to convince top agents at other firms to move.
28:05
SPEAKER_00: And historically, it's very hard to convince them to switch brokerages.
28:09
SPEAKER_00: If you've got to give them something, they can't offer the sellers anywhere else.
28:13
SPEAKER_00: And that's exactly where this private listing strategy does.
28:16
SPEAKER_00: Because agents at most traditional brokers are still operating under MLS rules, which means if they market a listing, they put it in MLS.
28:23
SPEAKER_00: They don't get the option of hiding the days on market.
28:25
SPEAKER_00: They don't get the option of suppressing price history or any other deals that fell through.
28:30
SPEAKER_00: But COMPAS believes their agents can't offer that.
28:32
SPEAKER_00: Of course, I think it's also in violation of the fiduciary duty, but what the hell do I know?
28:36
SPEAKER_00: But at least that's their pitch.
28:37
SPEAKER_00: And when COMPAS recruiters start talking to these top producing agents and competing firms, that's going to become the message.
28:43
SPEAKER_00: If you want to access the marketing strategy, you have to be at Compass.
28:47
SPEAKER_00: If you're competing with the listing presentation, I can give you a private marketing phase that other brokers can't offer.
28:52
SPEAKER_00: That's a compelling story.
28:53
SPEAKER_00: Of course, it can only be compelling if you don't tell the seller the whole story, which is that you'll make less money selling your house.
28:59
SPEAKER_00: But you've got to understand that's what they're going to be selling.
29:01
SPEAKER_00: They've been trying to sell this bad bill of goods already for a year and it won't stop them moving forward.
29:05
SPEAKER_00: But at the same time, they have to understand that they're not going to be the only one doing this.
29:10
SPEAKER_00: If this actually takes place, then the other brokerages will all come together and do the same thing.
29:15
SPEAKER_00: Because inventory is power, and those who have the most inventory typically wins.
29:19
SPEAKER_00: Listing generates buyer leads, buyer leads generates transactions, and transactions generate revenue.
29:25
SPEAKER_00: So if COMPAS can somehow convince top agents to bring their listings into their ecosystem, they slowly start accumulating something valuable, a control of the inventory.
29:33
SPEAKER_00: And once the broker controls a significant portion of this inventory, it becomes a lot easier.
29:37
SPEAKER_00: Recruiting becomes easier, lead generation becomes easier.
29:40
SPEAKER_00: Even negotiating with portals becomes easier.
29:42
SPEAKER_00: This is where the Redfin partnership becomes even more interesting because one of the biggest criticisms of Compass's private listing in the past was visibility.
29:48
SPEAKER_00: But now they say, okay, well, if my listing isn't on the MLS, few buyers get to see it.
29:53
SPEAKER_00: That was always a weakness in the strategy.
29:54
SPEAKER_00: But now they have an answer saying, yeah, but we still reach millions of our buyers through RedFIN.
29:59
SPEAKER_00: As I close today, there are three things agents should be thinking about right now.
30:02
SPEAKER_00: Because whether you love this compass or hate this compass deal, this conversation isn't going away.
30:06
SPEAKER_00: This is bigger than the one brokerage.
30:08
SPEAKER_00: This is about how listings are going to be controlled in the future.
30:11
SPEAKER_00: And if you're an agent in this business, there are three questions you need to be asking yourself.
30:15
SPEAKER_00: Number one, who controls the listing inventory?
30:18
SPEAKER_00: First question is very simple.
30:19
SPEAKER_00: Because in residential real estate, inventory is power.
30:22
SPEAKER_00: For decades, the MLS controlled the inventory.
30:24
SPEAKER_00: Every brokerage contributed listings, and every brokerage got access to listings.
30:28
SPEAKER_00: It created a cooperative marketplace.
30:30
SPEAKER_00: But if large brokerages start keeping listings inside their own real estate ecosystem, that's going to change everything.
30:37
SPEAKER_00: Suddenly, the brokerage with the most listing has the most leverage.
30:40
SPEAKER_00: They're going to generate the most buyer leads and they're going to most transactions.
30:44
SPEAKER_00: And eventually, they can influence where buyers search and how they get deals done.
30:48
SPEAKER_00: So agents should be asking themselves, if listings start fragmenting across different platforms, where will your buyers actually find homes?
30:55
SPEAKER_00: Because if they're only searching the MLS and a large portion of listings start living elsewhere, that becomes a real problem for buyer representation.
31:01
SPEAKER_00: Secondly, what does this mean for fiduciary duty?
31:04
SPEAKER_00: This is where things get really interesting, in my opinion, from the legal perspective.
31:08
SPEAKER_00: As agents have a legal obligation to act in the best financial interest of clients.
31:13
SPEAKER_00: For sellers, that means usually exposing the property to the largest possible pools of buyers.
31:17
SPEAKER_00: More exposure generally means more competition, which means better price.
31:21
SPEAKER_00: So if a seller is encouraging, encouraged to limit exposure to the broader marketplace, the question becomes: is that strategy truly designed to maximize seller outcome or is it designed to support a brokerage's broader business strategy?
31:37
SPEAKER_00: I would hate to be the person before a real estate commission trying to answer that question.
31:41
SPEAKER_00: I'm not trying to say that every private listing violates fiduciary duties.
31:46
SPEAKER_00: There's at some legitimate situations that make sense.
31:49
SPEAKER_00: But if it becomes systematic across your entire brokerage, then I think regulators are going to start asking these questions.
31:55
SPEAKER_00: And agents should understand the fiduary duty lives in state law.
31:59
SPEAKER_00: So if this model spreads, agents are going to have to be very careful that they are fully explaining the trade-offs to their clients because the last thing anyone wants is to end up explaining this strategy in front of a real estate commissioner or a judge.
32:11
SPEAKER_00: Thirdly, lastly, what happens if this trend accelerates?
32:15
SPEAKER_00: Because if multiple brokerages start building their own listing networks, the entire housing market is going to become fragmented.
32:22
SPEAKER_00: Just like in Europe.
32:22
SPEAKER_00: Instead of one open marketplace, you could have several competing ecosystems, whether it's the MLS, portals, whatever.
32:29
SPEAKER_00: And if that happens, now buyers are going to have to go to multiple platforms just to see what's available in their own city, something they could do easily right now.
32:36
SPEAKER_00: That's all going to change.
32:38
SPEAKER_00: Maybe new technology is going to stitch all this together again.
32:41
SPEAKER_00: I don't know.
32:42
SPEAKER_00: But I think it's very fair to say the housing market needs to remain open and transparent.
32:47
SPEAKER_00: But the point is, the structure of the industry that we've all operated under for decades is no longer guaranteed.
32:53
SPEAKER_00: And this compass redfin rocket deal is one of the clearest signs yet that this battle is not over.
32:58
SPEAKER_00: It's just beginning.
32:59
SPEAKER_00: At the end of the day, there's smart people on both sides of this deal.
33:02
SPEAKER_00: Some believe the MLS system is outdated and needs to be evolved.
33:05
SPEAKER_00: I don't disagree with that.
33:06
SPEAKER_00: Others believe that transparency and open marketplace are essential for the consumers.
33:10
SPEAKER_00: I think that's paramount.
33:11
SPEAKER_00: But one thing's for certain, the industry is going through one of the biggest structural changes we've ever seen in decades.
33:17
SPEAKER_00: And if you're an agent or a broker or an industry professional, this is a conversation you should absolutely be paying attention to because however this plays out, it's going to shape how homes are bought and sold for years to come.
33:30
SPEAKER_00: And you better believe we'll be watching it closely here at Dish and Dirt.
33:34
SPEAKER_00: All right, all the time we have for our show today.
33:35
SPEAKER_00: I hope you all enjoyed it.
33:36
SPEAKER_00: We'll be talking more about these lawsuits that we continue to see and some other big legal things that are happening in the industry in the weeks to come.
33:42
SPEAKER_00: Please like us, share us, and tell all the other real estate agents all about us.
33:46
SPEAKER_00: Y'all have a great weekend.
33:47
SPEAKER_00: Come back again and see us.