A fight over who gets to see homes for sale in California has turned into a federal lawsuit. The California Regional Multiple Listing Service, known as CRMLS, sued Compass, the nation's largest real estate brokerage, on Oct. 5 in federal court in Manhattan.
A multiple listing service, or MLS, is the shared database agents use to find homes for their buyers. CRMLS rules say that if a seller lets their agent publicly market a home, the listing has to go into the MLS so every participating brokerage can bring buyers, not just one.
What Compass wants
Compass wants agents to be able to publicly market what it calls "office-exclusive" listings without putting them in the MLS and without being fined for it. On Sept. 8, Compass sent CRMLS a demand letter giving it until 5 p.m. Eastern on Oct. 6 to stop enforcing those rules, or face a federal antitrust suit, Inman reported. The letter said Compass would "spend millions of dollars to sue CRMLS and other MLSs." Compass CEO Robert Reffkin later told an industry conference the company planned to start suing MLSs that keep penalizing agents in mid-October.
CRMLS moved first
Instead of waiting, CRMLS filed a declaratory judgment case a day before the deadline. It asks the court to declare its Rules 7.9 and 7.9.1 legal under the federal Sherman Act and California's Cartwright Act, and to permanently bar Compass from bringing antitrust claims over them, Bloomberg Law and Inman reported.
The complaint accuses Compass of trying to "free-ride" on listings shared by thousands of other brokerages while "hoarding its own inventory." CRMLS CEO Art Carter said in a statement that the case "is about more than defending CRMLS from a lawsuit" and about protecting an open, transparent market. Compass argues sellers should have the choice of how their home is marketed.
Why buyers and sellers should care
If homes are marketed publicly but kept out of the MLS, buyers working with other brokerages may see fewer listings, while sellers could reach a smaller pool of buyers. The outcome could shape how homes are marketed across a state where buyers already face some of the highest prices in the country. The court docket shows filings in the case continued through Oct. 8.