Compass vs. NWMLS: A Battle Over Real Estate Market Freedom
A recent press release from Compass highlights the issue at hand: the lack of freedom for homeowners in Washington state when it comes to pre-marketing their homes. In every other state, homeowners have the option to list their homes as Compass Private Exclusives or Compass Coming Soon, allowing them to benefit from pre-marketing strategies.
Compass has filed a complaint against NWMLS, accusing the organization of being a monopolist and a group of competing real estate brokers. The complaint alleges that NWMLS has a stronghold on the residential real estate market in the Seattle area, with nearly all transactions being listed on their platform.
According to Compass, NWMLS has implemented rules that limit competition among real estate brokers in the Seattle area, forcing homeowners to use their platform for buying or selling a home with a real estate professional.
Despite Compass’s attempts to introduce innovative offerings like office exclusives, NWMLS and its co-conspirators, including traditional real estate brokerages, have enforced rules to prevent such listings. NWMLS even changed its own rules to block Compass’s efforts to allow office exclusives.
After facing resistance from NWMLS, Compass made changes to their marketing strategy, only offering their services to sellers who sign non-exclusive listing agreements. However, NWMLS quickly responded by changing their rules to require properties listed with non-exclusive agreements to be submitted to NWMLS and subject to their regulations.
Compass claims that NWMLS further hindered their efforts by enforcing Rule 6, which disallowed properties where the seller reserved the right to decide on a commission for the buyer’s broker. This move led to NWMLS shutting off Compass’s IDX feed without prior notice or due process.
Through its alleged anticompetitive behavior, Compass asserts that NWMLS is depriving consumers of their right to choose how to sell and market their properties, stifling competition, limiting innovation, and reinforcing their monopoly in the market.
Compass is now seeking legal action against NWMLS, demanding damages and a permanent injunction to prevent further anticompetitive practices under the Sherman Antitrust Act.
The conflict between Compass and NWMLS escalated after public exchanges between Compass CEO Robert Reffkin and NWMLS CEO Justin Haag. The tension reached a tipping point when a website backed by Compass, Washington Homeowner Rights, emerged to gather support for a potential class action lawsuit against NWMLS.
As of now, NWMLS has not provided a response to these allegations.