Art Carter, CRMLS ‘stand firmly’ in support of Clear Cooperation

As the debate surrounding the National Association of Realtors’ (NAR) Clear Cooperation Policy (CCP) rages on, California Regional MLS (CRMLS) CEO Art Carter chose to voice his stance on the issue in a nine-page op-ed posted on LinkedIn this week.

In the op-ed, Carter said that CRMLS is rejecting demands to change its stance on CCP. The MLS is standing “firmly behind the intent of the policy,” he wrote. Under CCP, listing brokers must submit a listing to the MLS within 24 hours of marketing a property.

According to Carter, CRMLS supports the policy due to the transparency of data it provides. Much of the criticism surrounding CCP has been about how certain information (like days on market and price drop history) can supposedly have a negative impact on a listing. But Carter believes this information is vital for consumers, as days on market helps a buyer negotiate a price while helping a seller with pricing strategy. Price drop histories can indicate a flexible sale price for a buyer and it can increase a listing’s visibility for a seller.  

Thus far in the CCP debate, Carter said CRMLS has been asked to revoke CCP, creating a private listing network that would withhold available properties from unrepresented consumers while making the listings accessible only to CRMLS subscribers. It would also conceal certain property information from buyers. CRMLS has rejected these demands.

In Carter’s view, by creating a platform where all agents and their clients have access to the same, accurate information about available properties, the MLS enables real estate professionals and their clients to “make informed, equitable decisions.” The CCP acts as a “safeguard against select brokerages keeping information exclusive and hidden.”

“If a listing circulates only within one brokerage, the days on market (DOM) could be misleading, and other buyers are denied the chance to compete for the property,” Carter wrote. “But when that listing is posted on the MLS, agents gain valuable insights such as accurate pricing, feedback on the property, and potential buyers. Moreover, if a listing is never on the MLS, sellers lose the opportunity for a wider pool of buyers and potential bidding wars/”

Due to this, Carter believes that the CCP is integral to “upholding the integrity of the MLS” and “is necessary to foster collaboration and ensure that all parties have access to a transparent and fair marketplace.” He believes this is critical for maintaining trust in the real estate industry.

Carter also notes that CRMLS is a “broker cooperative.” Consequently, it develops and implements business practices that it feels supports brokers and their clients. This is in contrast to a listing platform, and Carter believes the sole function of these is an advertising tool for sellers.

“A broker cooperative needs to provide meaningful services to all of its subscribers, their clients and other stakeholders,” Carter wrote. “While listing platforms are valuable and some of our best customers, they do not establish rules, policies, or systems to facilitate cooperation between agents. Instead, they focus on advertising properties for sale and offer historical information.”

The op-ed also notes that sellers who choose to hire an agent to list their property are allowed to not use the MLS under CRMLS rules if they enter into an open listing agreement with that agent. According to Carter, CRMLS members were trained on this prior to the implementation of CCP in the spring of 2020.

“Any competent listing agent can effectively use the terms of a non-exclusive listing agreement to meet the needs of a seller who prefers not to have their property widely disseminated through the MLS and its corresponding IDX distribution systems,” Carter wrote.

“This approach is particularly relevant for high-value properties, where it is common for showings to require signed non-disclosure agreements (NDA) to ensure privacy and facilitate the exchange of proof of funds between buyers and sellers. NDAs can easily include provisions to protect the listing firm’s commission rights by preventing a buyer broker from bypassing the listing firm and negotiating directly with the seller.”

Carter went on to state the CRMLS will not participate in any plan to intentionally misrepresent or withhold information about a property’s listing history and the number of days it has been available for sale — whether a buyer is represented or not. He notes that these types of schemes could subject CRMLS to “significant liability.”

According to Carter, some brokerage firms are pressuring CRMLS to take these sorts of actions as they are “seeking to force buyers to find properties exclusively on that broker’s own website.”

“Such a strategy would also benefit the brokerage by pressuring buyer agents from competing firms to leave their current brokerages and join the firm controlling the hidden inventory,” Carter wrote. “However, CRMLS will not implement rules that favor a particular business model at the expense of others, especially when it causes direct harm to potential buyers, as well as sellers whose properties languish on the market longer than necessary.”

In addition to not participating in any plans to misrepresent or hide listings, Carter said CRMLS will also not be establishing a private listing network that is exclusive to CRMLS subscribers. Doing so, he said, would “clearly disadvantage consumers who choose to not work with a real estate agent, as they would have no access to the listed inventory.“

According to the op-ed, some brokers have threatened to sue CRMLS and other entities if they do not comply with requests to revoke CCP.

“As those in the real estate community evaluate the attacks on Mandatory Cooperation, we should all ask why certain brokerage firms are afraid to compete in an open marketplace where all consumers, and the brokers they choose to hire, have fair and full access to all properties?” Carter wrote.

Carter also sees openings for lawsuits to be filed by sellers and buyers who are harmed by off-MLS listing practices. He believes sellers could experience things like longer times on market, while buyers will suffer due to limited publicly available housing supply, or be forced to work with a broker who has a larger internal listing network in order to unlock additional inventory.

Despite his rhetoric, Carter said the issue is not simply about a brokerage double-ending a transaction.

“It is about redirecting buyers away from their chosen agents and forcing them to work with the exclusive listing agent, who controls all information and access to the property,” Carter wrote.

As the debate surrounding CCP continues, Carter wrote that he feels it is important to remember that the policy is “both rooted in and necessary to maintain fairness. Without it, anti-competitive practices could proliferate.”

“If listings were all to remain hidden within select brokerages, we’d be creating an uneven playing field that limits consumer choice, distorts market fairness, and could benefit large players in the market to the detriment of smaller businesses,” he wrote.