NAR's Clear Cooperation Policy Explained

The National Association of Realtors (NAR) is still facing legal challenges. The Clear Cooperation policy, which has been controversial, is set to go to trial by the Justice Department in late 2025. After the significant class action settlement involving NAR and several major franchises, it feels risky for NAR to continue with the Clear Cooperation policy. This policy has previously been criticized by the Justice Department and has faced lawsuits in the past.

Locally, our team has addressed similar policies through legal action with our local real estate board. Unfortunately, we eventually had to decide that continuing the fight against the National Association of Realtors' Clear Cooperation policy was not financially viable, even though I believed it violated the Sherman Antitrust Act.

What is the Clear Cooperation Policy?

The Clear Cooperation policy requires home sellers to list their properties on the MLS within one business day of their agent publicly marketing the home. Public marketing refers to any advertising that is visible to multiple people at the same time. For example, putting up a for-sale sign, sending an email to multiple recipients, or any type of online advertising would be considered public marketing and fall under this policy.

Pros & Cons of Clear Cooperation

There are benefits to the policy, mainly for buyers and MLS providers who want to protect their business, along with large portals like Zillow and Realtor.com. It helps ensure that all available inventory can be viewed in one central location. This can be advantageous, as I’ve mentioned in previous videos. While traveling to other countries and exploring their real estate markets, I found it difficult when there wasn't a single source where all available homes could be found. It is challenging and often frustrating for buyers to search multiple sites and discover that some properties aren't even listed online. This policy helps prevent those issues, which is a significant benefit.

The benefits are clear for buyers and some industry insiders. On the other hand, the cons primarily impact certain sellers. It is their home, and I believe homeowners should not be restricted in how they market their property. Homeowners should have the freedom to advertise their property in any format they choose. In some ways, it feels like a free speech issue, as homeowners should have the right to control the marketing of their own property.

How Clear Cooperation Negatively Affects Sellers

There are two main ways that Clear Cooperation can impact or harm sellers.

The first scenario involves a seller preparing their home for sale but needing to wait until it is fully ready before any marketing exposure is allowed. For instance, the home might need new carpet, painting, or other preparations. There could be a gap between the time these updates are being made and when the home is officially listed on the market. During this period, potential buyers might be interested in viewing the home. Due to Clear Cooperation, public marketing to inform buyers that the home will be available soon is not allowed, nor are showings. This can be problematic for sellers who find themselves in that preparation period and might miss out on potential buyers.

The second scenario is for a seller who wants to test the market with a higher price. Sometimes sellers aim for a higher price than what their real estate agent recommends. Pricing a home too high can negatively affect the sale due to accumulated days on the market and a history of price reductions. This can drag down the listing’s appeal. A useful strategy is to test the market before officially listing it on the MLS, avoiding the accumulation of price history and days on market. This method can be effective for sellers wanting to test the waters with a higher price. In some cases, a seller may secure a higher price by maintaining limited availability and a sense of exclusivity for buyers during that period.

This approach often aligns with the time spent getting the home ready. I have seen it work to a seller’s advantage, impacting how much they can get for a home. It has been beneficial for some sellers in the past when this strategy was available. Unfortunately, with Clear Cooperation, sellers are unable to use these strategies due to the National Association of Realtors' policy.

There is an additional downside to Clear Cooperation. Some brokerages might use this policy as a marketing tool to build their market share rather than focusing on the seller's interests and securing the best possible price. While this policy can help sellers achieve a high price, it can also work against them, impacting their ability to get the top price for their home.

Policy Concerns and Impact on Consumers

The bottom line is that I believe the Clear Cooperation policy is dangerous and anti-competitive. The National Association of Realtors (NAR), as a trade organization, is forcing its members and the public to follow rules that do not always serve the best interests of consumers. I see this as a slippery slope. While it benefits NAR by balancing power between large and small brokerages, boosting memberships, and increasing dues, it has negative and unintended consequences for both home sellers and buyers. This policy can keep service quality low for consumers, especially when over half of agents in the market today sell between 0 to 2 homes annually.

Agents with such low transaction numbers often lack the competency and experience to provide great service to consumers. The policy ends up supporting these agents and, by extension, NAR itself, rather than prioritizing the needs of consumers. This is a significant downside that impacts overall service quality. Another negative aspect is the sheer number of real estate agents in the market who do not provide the level of service that consumers deserve. This policy bolsters agents who might not deliver the highest standard of care to home sellers.

On the positive side, the policy is beneficial for buyers who want to view all available homes in one place. This feature sets the U.S. apart from many other countries. But there is a trade-off—it gives large tech companies an advantage over local real estate businesses. This is yet another unintended consequence of the Clear Cooperation policy.

Balancing these factors is challenging. With one major lawsuit already settled, I believe NAR is taking a big risk by pursuing a policy that could lead to further legal action from home sellers. Additionally, I don’t think this policy aligns with the Sherman Antitrust Act, and NAR should not have the authority to dictate how home sellers market their properties.

If you're considering selling your home, reach out to the Matt Curtis Real Estate Team, the number one real estate team in Alabama. Over the past five years, we have helped more than 7,600 families buy and sell their homes and have earned the highest number of reviews in the state. Contact us at 256-333-MOVE.

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