Damian Eales: Private listings are a 'right side of history' test
At the MLS Forum in D.C. last week, the Realtor.com CEO described the shift toward a market “where information is not shared” as “almost incomprehensible.”
Key points:
- Eales spoke bluntly at the Realtors Legislative Meetings, telling attendees that “the industry has a decision to make as to whether or not they are pro-cooperation.”
- He lauded the MLS system in the U.S. for providing open access to listing information and ensuring “everybody benefits on equal terms.”
- Limiting access to property details, such as days on market or price reductions, “strikes me as madness,” he said.
WASHINGTON, D.C. — Realtor.com CEO Damian Eales has previously signaled opposition to the proliferation of private listings and condemned the market fragmentation that results from their widespread use.
But at the National Association of Realtors' midyear conference last week, Eales was more blunt.
"I genuinely believe that history will look back on this time, and people will be either on the wrong side or the right side," Eales told attendees at the conference's MLS Forum.
"The referee in this instance will look at who stood on the side for ensuring that we didn't trade free listing promotion for a seller for the benefit of other financial benefits to the broker, and that we ensured buyers had all of the information available to make the most important decision in their life."
The MLS Forum was closed to press, but Real Estate News was able to obtain a recording of the session.
The 'genuinely unique' value of the US system
Eales noted that, in contrast to his native Australia, listing agents in the U.S. don't have to pay to promote their listings on the most popular portals, and homesellers don't have to pay the advertising costs to market their homes. Meanwhile, "buyers get access to all properties at their search engine of choice, and most importantly, they get access to all important information about a property," he said — a system not seen anywhere else in the world, according to Eales.
"I'm not too sure if everybody in the United States properly recognizes the value of what's been established here as genuinely unique," he said.
He compared the U.S. MLS system to the New York Stock Exchange — an entity that works because it is regulated federally and also self-regulated. Like the NYSE, Eales argued, MLS rules "create an efficient market to end asymmetry of information to ensure that everybody benefits on equal terms."
An erosion of consumer protections?
But, Eales stressed, there is a "devolution of protections" in the housing market — where real estate makes up more than 60% of the net wealth of the average American family and assets are typically leveraged to 80 or 90% — compared to someone buying $100 worth of stock on the NYSE.
"The industry has a decision to make as to whether or not they are pro-cooperation, they are pro-open markets, pro-transparency, and perhaps more than anything … that they are pro-ensuring that American buyers and sellers — consumers — are treated fairly in the transaction," Eales said.
Buyers should have the right to see information about a property that they're about to purchase, according to Eales.
"It strikes me as madness that Redfin right now has stopped showing what some would call 'negative insights' about properties to their buyers," he said.
"It's almost incomprehensible" that the market "is moving towards a position where information is not shared, where it's asymmetrical information, where only some have the information required to properly value that asset," he added.
Fiduciary duty 'being tested'
MLS and association leaders have a duty "to create mechanisms to protect consumers, not to create harm to consumers," Eales argued.
Apparently referencing Compass' claim that private listings benefit sellers, he added, "We should be very wary of those who rebrand a lack of protection or devolution in protection under terms like 'seller choice.'"
He framed the "choice" being presented by listing agents pushing private listings as the "choice to take less promotion, to limit access to free promotion, in return for me generating more leads leveraging my client's asset."
Agents have a fiduciary duty to act in the best interest of their clients, but that duty is "being tested," according to Eales.
"We should not create mechanisms or policy or propaganda that encourages people to do exactly the wrong thing," he said.
"Be on the right side of history, and the right side means that you should be standing up for the benefit of the buyers and the sellers," he added, garnering applause from attendees.