A way to end private listings fight? Make Clear Cooperation the law
A draft bill in Illinois would require licensed agents to add listings to a “platform or website accessible to the general public” within a calendar day.
Key points:
- IL State Rep. Lilian Jiménez said she was interested in the fair housing aspect of the bill and sees value in adding “safeguards” to protect Illinois consumers.
- Zillow is a partner on the bill, leading Illinois Realtors to suggest the effort is an attempt “to codify a real estate portal's business model into state law.”
- Private listings aren’t new to Illinois, but a Chicago brokerage leader thinks the recent push toward office exclusives as a brokerage strategy “is not going to work.”
As industry leaders continue to debate the merits and risks of private listings, some lawmakers are taking the matter into their own hands. In Illinois, Clear Cooperation — or a variation of it — could become state law if a draft bill currently in committee in Springfield is eventually passed by the Illinois General Assembly and signed by Governor J.B. Pritzker.
The bill, HB3452, seeks to modify Illinois' Real Estate License Act of 2000, the legislation that outlines duties and responsibilities for licensed agents, to include new text requiring agents to add their listings to the MLS — or another "platform or website accessible to the general public" — in a timely manner similar to NAR's Clear Cooperation Policy.
Specifically, the bill requires agents to list the property within one calendar day of "the start date of any brokerage agreements authorizing the licensee to sell or lease the client's property."
There is an opt-out that allows for private listings, but it would require a higher degree of disclosure to sellers and the completion of a form that would come from the state's Department of Financial and Professional Regulation.
Seeking 'guardrails' to protect consumers
The bill was introduced by Illinois State Representative Lilian Jiménez, who represents a quickly gentrifying district in Chicago where home prices have soared over the last decade. Jiménez told Real Estate News that she is primarily focused on fair housing and ensuring all buyers can access all homes for sale at any given moment.
"There is a long history of redlining, block-busting and segregation in our communities, and I think the real estate industry, just like every other industry, needs to have a certain level of guardrails — which we can call regulation — but just means that the consumers' interests are represented," Jiménez said.
The bill has been in committee since March 21, and Jiménez said she hopes to continue speaking with fellow representatives about pushing the bill further along. Partners on the bill include the National Association of Hispanic Real Estate Professionals and Zillow.
A representative from Zillow said the company does "frequently engage with policymakers to ensure the U.S. continues to have the world's most open and efficient real estate marketplace," consistent with statements from company leaders. Zillow will continue working with industry stakeholders and elected to help "safeguard and enhance fair and transparent access," the spokesperson added.
Are new laws the answer?
Some argue that the industry needs fewer regulations, not more, and that private exclusives are about seller choice. Is the push for off-MLS listings truly a threat to an open market and a potential harm to buyers and sellers?
"I think it's more than fair to say that we could have some safeguards here in Illinois on this industry to make sure that we're protecting consumer rights," Jiménez said.
Jiménez's bill aimed at the brokerage community stands in contrast to a handful of other housing-related bills backed by Illinois Realtors which are designed to cull back regulation and allow homes to be built more quickly in a state where the zoning and entitlement process can be notoriously lengthy and costly.
Illinois Realtors alludes to hidden agenda
In a statement shared over email, Illinois Realtors CEO Jeff Baker said that his read on HB3452 "was that it was less about clear cooperation and was more designed to codify a real estate portal's business model into state law," adding that it was not a part of Illinois Realtors' legislative agenda.
"The bill was never assigned to a substantive committee for further consideration after its introduction," he said. "Illinois Realtors is committed to ensuring the Real Estate License Act remains a model for both consumer protection and maintaining a fair and level playing field for real estate practitioners."
Chicago brokerage leader criticizes 'fear-based recruiting'
From an operations standpoint, private listings have long been an option in the Chicago area, explained Laura Ellis, Baird & Warner chief strategy officer and president of residential sales, who noted that MRED — the local MLS — has had its own Private Listing Network for nearly ten years. So far, Compass agents have entered their private exclusives into MRED's PLN, she said, allowing the entire real estate community to see what is available.
But she takes issue with leaning into private exclusives as a brokerage business model.
"It's fear-based recruiting to try to attract productive agents to further gain more market share," she told Real Estate News. "I think that over time, Compass' strategy is not going to work with the typical successful, highly-productive real estate broker."