‘Unfiltered’: A ‘huge risk’ of litigation over private listings? 

On this episode of Real Estate Insiders Unfiltered, Windermere Real Estate Co-President OB Jacobi delves into the debate over private listings and explains why he believes they are a legal "ticking time bomb" for Compass, which has embraced the strategy — and why NAR should stay out of the rulemaking business. 

A 'nasty' debate: Jacobi and Compass CEO Robert Reffkin have publicly traded barbs over the issue — and that alone demonstrates a shift in the industry. "Never in my lifetime have we seen leaders calling leaders out in ways that are so contentious," Jacobi observed, adding that agents are taking sides too. 

"People are sitting across the table fighting about it, which is really a new thing in our market," Jacobi said. And social media has only intensified that ire: "It gets nasty now."

Standing up 'for what's right': Jacobi is aware that the sparring over private listings isn't making life easier for agents, but he thinks it's important "to stand up for what's right in the industry."

"At the same time, we've got to walk a tightrope of, OK, how do we make sure our clients, our agents, are having the best experience or given the best tools," he added.

Don't ignore the litigation risks: Many sellers who choose to list off the MLS "aren't doing it because they're raising their hands going, 'I want a private network,'" Jacobi believes. "They're doing it because the agent says, 'This is what's best for you.'"

That approach could backfire. "In my opinion, it's a ticking time bomb for Compass. There's going to be a lawsuit where somebody said, 'Your agent didn't give me a choice and sent me into your private listing network, and I could have gotten more money in the open market,'" Jacobi warned, echoing similar concerns expressed by eXp CEO Leo Pareja. 

"I think there's huge risk in it."

What 'doesn't make sense' about PLNs: Ensuring seller privacy can be important at times, Jacobi acknowledged, citing Windermere's handling of the home sold by New York Giants quarterback Russell Wilson and Grammy Award-winning singer Ciara as an example.

But, he noted, "we have the tools and mechanisms to do that" within the MLS. For most listings, Jacobi said wide exposure is beneficial, and having "a whole system that caters to all private doesn't make sense to me."

NAR should give up control: Jacobi's "hope and desire" for the industry is that the National Association of Realtors "gives the rulebook to local MLSs." Jacobi, who admitted he has "a lot of issues with NAR" and described the trade association's handling of changes to its controversial Clear Cooperation Policy as "terrible," wants to see real estate become "a better place for local practitioners."

Ideally, real estate professionals will have more control over the rules and guidelines for their local markets — and this could benefit NAR, Jacobi said.

"I actually think NAR is going to get better over the coming years, because they will give up the control and they'll focus on the lobbying and the things that are good for us as an industry and consumers in general, which is where their strong point is," he said. His prediction? That NAR will "get stronger by releasing some power."