Understanding history helps guide tomorrow, and in the context of real estate—it is incredibly prescient. Likewise, the sharing of opinions and information is a fundamental underpinning of free markets; trying to stifle discussion is suppressive and a bully tactic.
Last week, I received a Cease and Desist letter from Compass related to my recent opinion pieces on the importance of co-brokering, the spirit of Clear Cooperation, and the new imminent dangers of real estate firms keeping their listings for a private internal audience.
Citing their own research, Compass’ letter was basically a denial that their three-phase marketing strategy was intended to promote pocket listings while increasing their commissions, and that my rhetoric is dangerous for agents, sellers’ choice, and free market competition.
Brown Harris Stevens responded by quoting Article One, Section 8 of the New York State Constitution which guarantees freedom of speech and press, stating that every citizen can freely speak, write and publish their sentiments, but are responsible for abusing that right, and no law shall restrain or abridge this liberty.
Our letter went on to say that there is considerable debate today in the housing market, and that opinions and discussions are important and should not be muted simply because there is disagreement.
It is obvious to me that we are at a critical time in the real estate brokerage business as there seems to be a movement to eliminate an important policy that benefits consumers all over the country—the open sharing of listings. When it is widely published that a brokerage has gone as far as to incentivize their agents with hundreds of dollars in additional marketing budget if they keep listings in-house—that is a red flag to me. And it should be to every buyer and seller as well.
A free market is an efficient market. It has transparency and is a level playing field for everyone. I do not need people to agree with me; in fact, I welcome disagreement and discussion as I’m always willing and open to improve our industry. We should be engaging in open dialogues, not attempting to silence dissenting opinions.
Real estate brokerage has been slow to evolve because greed has historically superseded what is best for the industry as a whole. More than 20 years ago, there was an opportunity for real estate companies in New York City to come together and oversee all the listings and their information to build an MLS. Certain large companies disagreed and thought their websites would create more leads by keeping property information internal, pushing back on any community effort.
This gave birth to StreetEasy, which has become the de facto MLS in NYC and if you ask agents, sellers, buyers, and renters, it is inevitably where a lot of people begin their search. There have also been various attempts by The Real Estate Board of NY (REBNY) to create a so-called MLS system, but the industry has been slow to adapt.
The current co-brokering requirements at least ensure that agents should share information with everyone, whether it be on StreetEasy or websites and databases. It matters that this requirement stays in place in some form.
Our industry works best when there is complete transparency and sharing of information so that everyone knows what is out there. Because real estate agents represent sellers and buyers, it is our duty and obligation to act in the best interest of our client which often commands a public listing. If brokerages begin to adapt this internal hoarding model, other agents and their clients will not know what’s available, and big brokerages will take advantage and monopolize the industry under the guise of “free and fair competition.” But is it free and fair if you aren’t being transparent with your clients about the detriment of keeping a property hidden away—whether it is for a week, a month, or more?
Just as public companies have a primary fiduciary to their shareholders, real estate agents have a primary fiduciary duty to their clients—to put their interests first above all else, especially their own.
Editor’s note: Asked to confirm whether Compass issued a cease and desist to Freedman based on her previous opinion pieces, a Compass spokesperson shared the following statement:
“When a competitor writes an op-ed calling a company a Trojan Horse, the minimum response they should expect is a Cease and Desist.”
