In the latest twist in the real estate listing saga, Washington Realtors said it supports a piece of legislation that would limit the use of private listing networks in the state.
The bill is expected to be publicly introduced this week in the Washington state legislature, which began its 60-day legislative session on Monday. A draft of the bill was obtained by Inman on Monday.
The bill would amend existing state law regarding license right And unfair practices, and it would require agents to market properties to the broader public, rather than to “a limited or exclusive group of potential buyers.”
In a video update late last weekWashington Realtors leaders said they would support the change as part of what they said was the organization’s goal of making the state the most consumer-friendly place to buy and sell real estate.
“Ultimately, we feel that using private listing networks is contrary to our goal of being the most consumer-friendly state in the country for buying and selling real estate,” Ryan Beckett, president of the association, said in the video.
“We believe that the potential growth of private listing networks threatens the transparent marketplace that ultimately benefits both consumers and real estate agents,” he added, “and it could set us back in fair housing practices.”
Since the bill is not yet public, it is still unclear how exactly the state would regulate private listing networks, which are popular in some markets and have been a source of intense debate within the real estate industry over the past year.
Annie Fitzsimmons, an attorney with the organization, added in the video that “it is important to note that the bill does not ban private listing networks.”
“The agents currently using private listing networks can continue to do so, as long as the property is also marketed publicly,” Fitzsimmons said.
More about the invoice
A draft of the bill was shared with Inman on Monday afternoon, ahead of its expected public release later this week.
“It is an unfair practice for a real estate licensee to market the sale or rental of residential real estate to a limited or exclusive group of potential purchasers, potential tenants, or real estate licensees, or any combination thereof, unless the property is simultaneously marketed to the general public and all other real estate licensees, unless reasonably necessary to protect the health or safety of the owner or occupant,” the draft says.
Another section explicitly requires agents to publicly market a seller’s property “unless the health or safety of the owner or occupant” requires a different approach.
“Real estate agents representing a seller must sell properties to all members of the public and all other agents and may not sell the property only to an exclusive group of buyers or agents unless the health or safety of the owner or occupant so requires,” the language reads.
The draft did not identify the bill’s legislative sponsors.
Compass responds
Robert Reffkin speaking at the Compass RETREAT 2023 | Credit: Compass
In response to news of the bill, a Compass spokesperson called the legislation a “veiled attempt” to limit consumer choice.
“This bill is a veiled attempt by NWMLS and Zillow to maintain their market dominance by limiting homeowner choice and limiting competition, to the detriment of both sellers and real estate agents,” the spokesperson said.
“Compass believes that Washington homeowners deserve the same flexibility to choose when and where to market their homes as homeowners in every other state. Every other state offers flexibility that allows homeowners to test prices, gain critical positioning insights, maintain their privacy and confidentiality, and generate early demand without public price cuts or days on the market.”
Compass, which completed its acquisition of Anywhere Real Estate on Friday, has adopted a marketing strategy that includes a period in which listings are only available through the brokerage and its agents.
The listings, which the brokerage calls Compass Private Exclusives, allow sellers to test prices and otherwise prepare homes during a period outside the MLS. They can receive and sell offers at that stage, although most eventually end up in the MLS.
“Compass fully supports and complies with fair housing laws,” the spokesperson added.
Providing access is an industry
The debate over private listing networks flared up in Washington last year when the Northwest MLS was briefly interrupted Compass licensed the IDX data feed from the MLS in April.
Compass has sued Northwest MLS in response, he said the MLS was acting as a “monopolist” in Washington and Oregon.
“NWMLS is a monopolist and a combination of competing real estate agents,” Compass said in its complaint, filed in the Western District of Washington. “Almost a hundred [percent] of residential real estate transactions by real estate agents in the Seattle area are listed on the NWMLS, and NWMLS has no significant competitors,” meaning there are no rival MLSs.
A jury trial is scheduled for October.
Northwest MLS is the sole defendant in the lawsuit, but Windermere Real Estate Services was also named in the complaint as the “largest real estate brokerage in the state of Washington.”
Windermere, which has previously clashed with Compass over the topic of listings, is also apparently in line to support the bill in the Washington Legislature.
“With few exceptions, sellers want and deserve transparency, broad exposure and the confidence that they are getting the strongest possible offers for their homes. Only open markets can make that happen,” Windermere Real Estate President OB Jacobi said in a statement to Inman on Monday.
“Far from a step backwards, [the bill] strengthens and protects pre-existing standards, which are more important than ever,” Jacobi added. “Our industry should be built on serving consumers, not exploiting them, and we should all support these types of consumer protection measures.”
The lawsuit between Compass and NWMLS is also taking place in the backyard of Zillowwhich is also embroiled in a legal battle with the mega brokerage. That fight stems from Zillow’s policy of banning certain listings from its platform if they have been publicly marketed without being posted on Zillow.
In addition to clashing with Compass, Zillow’s rule has also become a point of contention — and in some cases even conflict — in markets like Chicago and San Antonio, where private listing networks are widely used and permitted by the MLS but do not adhere to the portal’s policies.
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