Ketchmark Lobbing Threats, CCP & Hanna Filing for Recusal

Anthony Lamacchia: Fate of clear cooperation at hand as Ketchmark issues new warning. [vocalizes] Woo. Ketchmark said he’ll consider legal action against brokers who vote to maintain the rule. That’s interesting.

Today also, Robert Reffkin of Compass says that the MLS is a monopoly amid the clear cooperation debate. Just yesterday, Howard Hanna Real Estate filed to request a recusal from Judge Bough out in Missouri. Remember the judge that I said was in on this, and they’re all connected somehow, and there’s a massive amount of corruption going on. In fact, I distinctly remember in the debate referring to the court as Ketchmark’s Court. Well, here we are 15 months later, and Howard Hanna Real Estate, one of the greatest real estate brokerages in America, the largest privately held, filed, requesting a recusal and pointing out some of the exact things that I pointed out in the debate and other videos. I thought that was interesting.

What I wanted to do was get together with all of you and talk about this. Get here on camera and talk about this because this is clearly a case of Michael Ketchmark somewhat idly threatening the entire board of directors for the National Association of REALTORS. I can’t remember how many folks are on the board of directors, it might be 1,000, I think, something around that vicinity. If you read the wording in here, classic Ketchmark throws out a little threat, uses some loud language or hyperbole as he would refer to it when he said it to me one day before our debate, and then throws out a nice comment. Let’s take a look through the article so that we can discuss it.

“It is my expectation that after this meeting, when this comes to a NAR vote overall, that they’ll do the right thing and remove that policy and let the free market continue to work.” Interesting. Now I keep going. This statement I found to be interesting, “I don’t want anybody to suggest or think that I’m threatening the National Association of REALTORS or threatening anybody in that organization. What I’m saying is that whoever is voting to continue and enforce this rule, if we believe that it is done with anti-competitive goals in mind, that we will take their depositions and we’ll hold anyone who is involved in that responsible for that.”

Last time I checked, this guy is a plaintiff’s attorney in western Missouri. He’s not the Department of Justice. He is not the licensing board of realtors. He’s not in the anti-competitive arena of the Department of Justice or the FTC. Boy, he talks like it an awful lot. This is very interesting to me. The other thing that’s interesting to me is, does he realize? Do you realize, Michael, because I know you’ll see this video, do you realize that your statements here actually are in direct conflict and they compete with the settlement that you just received? Okay, the biggest win of your career, $333 million in attorney fees. Remember in the debate when I said that you and your attorney’s friends would receive $300-$400 million, and you said, “No, that’s wrong, your numbers are wrong.” My numbers weren’t wrong.

Let’s get back to what I was saying. You’re stating here that, “If there are anti-competitive goals in mind,” so you think it’s okay to remove clear cooperation and make it so that brokerages can hoard listings if they want to, and of course, if the seller’s involved in the decision, and not put the listings out publicly in the MLS once they are advertised publicly. You don’t think that that’s anti-competitive? You don’t think that there’ll be brokerages and bad actors out there who hoard properties?

Look at some of the brokerages, particularly Robert Reffkin running Compass. The guy’s clearly built a large, respectable company with a lot of great realtors in it. I have a lot of great realtor friends there, but he clearly has a financial interest in making sure that clear cooperation goes away. I’ll get into that in a few minutes. I want to stick with clear cooperation. I want to review the rule, and I want to talk about why it got put in place in 2019, because that is something that even the best in the industry are forgetting the “Why?”

Let’s review this.

“Within one business day of marketing a property to the public, the listing broker must submit the listing to the MLS for cooperation with other MLS participants. Public marketing includes but is not limited to, flyers displayed in windows, yard signs, digital marketing on public-facing websites, brokerage website displays, including IDX, digital communications, marketing, email blasts, multi-brokerage listings, sharing networks, and applications available to the general public. Adopted 11/19.” I happened to be in the room then, but I was not there to vote. I was simply there to listen. Let’s talk about why this even came up and why it got voted on.

Many people don’t realize, and I’m going to give you all a history lesson. The inventory of homes for sale peaked from about 2008 to 2012. In the United States, there were over 4 million homes for sale. In a state like here in Massachusetts, there were 47,000 homes for sale at the peak. Right now, this week, there’s about 8,000 for sale in Massachusetts. Nationally, there’s about 1 million or 1.1 million homes listed for sale. Probably a little less than that right now, but it’ll be up over 1 million soon nationally. Because of this extremely low inventory, that slowly but surely went down from 12 to 19, it made it a lot more tempting for some brokers and some brokerages to work to not list properties on the public MLSs.

Remember, these multiple listing services, it isn’t as if they hoard them. I remember when I debated Ketchmark, he’s pointing to the book. “Look here, it says members only. You have to be a member of the club.” No, Mike, that was used in the ’80s. MLSs nowadays are very open. They’re syndicating to several other websites. Obviously, the big ones and then thousands of others. Heck, since the settlement, compensation is not even mentioned in there anymore. These MLSs give everyone a fair shot. They give all buyers a fair shot to see everything that is for sale. They give sellers the peace of mind to know that their property was listed on the open market and everyone saw it.

Yes, of course, there’s a small percentage of sellers out there that say, “Geez, I’d love it if you could sell it without going on the open market. I’d love it if we didn’t need to have 60 people traipsing through my home on a Sunday open house.” I know some of that exists. We see some of that with our company as well, but it’s a very small amount. Yes, to the haters out there who like to troll my stuff and don’t understand the industry, you know who you are. Yes, we have marketed our link system just as other companies have done. We’ve said, “Hey, we have access for some properties that aren’t on the open market.” Yes, before they go on the open market. That’s what we’re talking about. We’re talking about properties before they get listed because many sellers sign up, and they say, “I want to get the rugs done. I want my landscaping to be done. List my home in a month.” During that time, we’ll market the property internally if the seller wants us to. That’s how that works.

We’re not in any violation of any rule because it says right here that it has to be listed within one business day of being marketed to the public. Really, if you add the days up, if a property was turned on and marketed to the public at 8:00 AM or 9:00 AM on a Friday, according to that rule, you don’t even have to go on the market till Tuesday morning, right? It’s one business day. I guess you should say Monday morning. Holidays might change that. My point is, it says one business day. No one’s violating rules when they do that. To the haters out there that say, “Oh, now you’re for keeping clear cooperation, but you guys do some marketing, you have some properties.” Of course we do. Just like every other brokerage and agent does to try to draw in some buyer leads. That’s natural in this business to do that sort of thing.

I am 100% behind keeping clear cooperation in place. It got put into place in 2019 because of low inventory and because of more brokerages, not only attempting, but many of which selling properties without putting them on the open market. There are people out there that have a little bit of a harder time getting access to all of the properties that are for sale if they’re not listed on the open market. They will be a little more unclear. We don’t want to turn into Europe or turn into South America, where an average buyer has to go to 7 different brokerages in a given town to see 75% of what’s for sale. That’s 50-plus years ago here in the United States in some instances, in some cases. We don’t need to do that.

The part that I’m pointing out that is in direct conflict to this Ketchmark settlement, the national real estate settlement, is, “The settlement states that all buyers should sign a written buyer’s agreement when they go out to see a property with an agent.” Well, if clear cooperation goes away, no buyer is going to want to sign anything, and heck, they really shouldn’t sign anything with any exclusivity if all of a sudden Compass is hoarding listings in various cities and this brokerage is hoarding them, and that brokerage is hoarding them. That’s a problem. It’s in direct conflict.

Mr. Ketchmark, you may want to think about that before you make statements like, you’re going to take depositions, et cetera. Look at the next sentence. “There are legal means that are available to hold any corporations, brokers, or companies who are involved in this accountable, and that’s what we would do.” Really? A plaintiff’s attorney who just won a case, okay, a case that they had no business winning, it was a terrible verdict, it’s a wrongful verdict, but you won, you got your settlement, you got your $333 million, now you’re somehow the police of the industry. Remember in the debate when I said, “Did someone anoint you the police of the industry?” I’ve used some phrase like that. Wild to me, some of these statements. “We can take the deposition of anybody who’s involved in the process, whether or not there’s a lawsuit against them, whether or not a release has been issued.” Really? Hmm.

The other case is closed because a settlement was approved by the judge, and you’re going to just randomly take depositions of board members of NAR? I’m a board member. You want to depose someone? Make me first on the list. I won’t be an easy deposition, my friend. I won’t be like others. I won’t be nervous. I’ll sleep very sound the night before, and I will face you and I will educate you on how this business really works and what’s really best for buyers and sellers because all of these plaintiff’s attorneys don’t understand it or don’t care because they got their millions. If you’re going to take depositions, I don’t quite understand how you do that without an active lawsuit. Sure, sign me up.

“What I’m telling you is, if they’re making a decision from this point forward, whether they’re going to continue and enforce the clear cooperation policy, that can continue to have concerns if it’s being used in a marketplace as a vehicle for further anti-competitive antitrust violations.” What? What? We have markets that we’re in that, yes, if we could keep some listings and try to double in more of them, that’d be great, but I don’t want to do that. I don’t want to do that because it’s not best for the consumer.

What’s best for the consumer, 99% of the time, is listing the properties on the open market. Yes, I tend to agree where Robert and I might see a little bit more eye to eye with respect to clear cooperation, might be in some extremely high-end properties. Truth be told, Compass has more of those. They’ve done a terrific job getting into more of the niche higher-end market, but come on. The cities that you have high market share, you’re hoping to be able to do this. That’s clear. That’s what you want to do. I find one of Robert’s statements interesting today. Apparently, he said this down in Nashville at the Inman event.

Something to the effect of, let me see here. I want to make sure I don’t quote him if it’s not something he actually said. With the fate of NAR’s clear cooperation hanging in the balance, Compass CEO, Robert Reffkin on Wednesday argued that those fighting– Okay, so this isn’t a quote. This is them saying this. He argued that those fighting to keep the rule are financially motivated. He criticized what he characterized as monopolistic industry rules and said he wants agents’ names on their listings. Some of this stuff he’s saying, I don’t totally disagree with, but I do want most of the clear cooperation aspects.

Here we go. “Cooperation was designed decades ago to allow me as an agent to collaborate with an agent in another company,” Reffkin added at another point. “Now you’re forced. Every one of you, at any time you collaborate with an agent, you’re forced to collaborate with portals, companies that don’t have agents, don’t have listings, and don’t have clients.” That doesn’t sound very nice. Let’s think about that statement again. “Now you’re forced, every one of you at any time, you collaborate with an agent. You’re forced to collaborate with portals, companies that don’t have agents, don’t have listings, and don’t have clients.”

There’s about nine different ways I could take that apart. I want to bring you back to the beginning when I talked about low inventory. This rule came into play because of the historically low– we’ve never had lower inventory than we’ve had in the last five years, never. That started to come about in late ’18, really ’19. That’s why this was voted on. Then it went even lower. We should be thankful that clear cooperation went into play before COVID hit, or it was maybe a month after it hit, but it was voted on the November before, because that creates a fair marketplace for all brokers, all agents, all realtors, all buyers, and sellers to have a shot at properties, whether they’re interested as a buyer or an agent. I wanted to point that out.

Here it is. This is the pot calling the kettle black, folks. Reffkin said today, “It’s financially motivated.” He said of the support for clear cooperation, adding that the rule was created to protect NAR and the money it brings in. Well, I can recall some earnings calls of Compass that have been quoted in the public domain. There’s been many times that Robert, who has mentioned that he would like to see clear cooperation go away so that they could increase, what is it? Compass 1 or some type of internal system.

Let’s be real here, Robert. Let’s call it what it is. You want it for financial reasons. You want to be able to hoard listings in the cities that you have extremely high market share. Take San Francisco, for example. I believe your market share is over 40%, and I commend you for that. I congratulate you for that. You guys also just acquired @properties. Phenomenal acquisition, phenomenal company. You’ve built a great company. To say that others want to keep clear cooperation for financial motivations, I think is generally off base. When you say that, you’re sort of arguing that you’re not doing it for financial reasons. Come on, let’s be real here. I don’t want to cause a fight with Robert. I don’t want to cause issues. I think that the plaintiff’s attorneys would love to see our industry in fights. I’m not looking to do that.

I want to point out what’s truthful here, point out what’s real, and point out what happens from the ground. A lot of CEOs of these companies haven’t sold thousands of properties before becoming brokers. I worked with hundreds and then thousands of clients directly. Buyers, sellers, et cetera. I understand the needs and wants of buyers and sellers. I understand, and I have seen firsthand when there has been a bad actor in a one-off case where they haven’t represented the fiduciary duty to the client. Having some parameters in place, having some guardrails to try to avoid that is a good thing. That’s why the board voted on it back in 2019. I hope everyone keeps that in mind.

Now, moving to the next topic. Hanna Real Estate. Give them all the credit in the world. Howard Hanna Real Estate based in Pittsburgh. Phenomenal company, the largest privately held in the nation. They filed yesterday to request that US District Judge Stephen Bough recuse himself from hearing the case due to ethics rules triggered by campaign contributions from lawyers representing the plaintiffs. Folks, in the debate, I said it how many times? I said it in how many videos since then? There’s a percentage of you that are hoping that our industry crashes who have been against me on that sort of thing. You know exactly who you are. I stated facts from the beginning. Everything that I pointed out in that debate and subsequent videos thereafter, we verified many, many different ways. Many different ways with all kinds of research. These plaintiffs’ attorneys absolutely have made campaign contributions to Andrea Bough, the judge’s wife. That has happened.

There’s been several other things that have happened that are a bit interesting. Like Ketchmark supporting senators like McCaskill who then went in and assisted in appointing these judges. This trail goes back years and years. For Hanna to get a real trial, if they end up in trial, which I give them a lot of credit for not caving to the settlement, no real trial can be done in Ketchmark’s court. I mean in the Western District of Missouri under Judge Bough. It can’t happen. Can’t happen, or there’ll be no such thing as a fair trial. I commend Hanna Real Estate for filing that. I hope they put more out there.

I saw that Reuters put out a great article last night pointing this out. I hope The Wall Street Journal, I hope The New York Times, which they won’t because New York Times has Deborah Kamen and Deborah’s on the other side, and isn’t actually a reporter. I hope that these things are put out there. I hope that they’re exposed and it’s not just me doing it from my small office here in [unintelligible 00:19:19] Watertown, Massachusetts.

One more thing to mention related to the cases. The other day, the Department of Justice filed a notice of appearance in the MLS PIN case. They are going to be appearing in some manner between now and April 2nd. Will they come in and say that they are against the settlement or will they come in and say they are okay with the settlement that has been proposed three times by MLS PIN? Remember, MLS PIN here in Massachusetts, it’s a standalone MLS, not connected to the Realtor Association. They’ve made the argument that compensation should be allowed to be shown because it’s open, it’s transparent. It violates the First Amendment right to not be able to have free speech and to put an offering out there. They pointed out other things. They’ve done a terrific job at that. It’ll be interesting to see which way the Department of Justice goes on that. Hopefully, there’s some new folks involved with the new administration that are seeing how the Department of Justice clearly has it out for our industry. That remains to be seen.

That’s one of the reasons that in the MLS that we operate most of our business on, there have been some certain rules with listing of properties that haven’t exactly been in line with clear cooperation. That’s another thing that you haters should make note of. We follow all the rules in all of the MLSs that we participate in. We follow all of the rules with the settlement. We make our biggest efforts through our training and everything we do, to adhere to the rules of the industry, including the settlement that kicked into gear August the 17th officially, nationally, and even sooner in states like New Hampshire. Our realtors have done a terrific job. I will say, for the most part across the industry, most have done a pretty darn good job at these kinds of things. Obviously, different companies have gone about things in a different manner. Some have varied. We have decided to avoid sharing broker-to-broker compensation and instead, having the contracts read that the compensation comes from sellers, comes from buyers, et cetera. That has, for the most part, worked out very well for us.

Unfortunately, statements that I’ve made before are proving to be accurate when I say these plaintiffs’ attorneys are not going to go away until our industry stands up and punches them in the mouth legally. That’s why I commend Howard Hanna Real Estate for standing up. I’m sure I’ll be back to you within a couple of weeks, but wanted to go over those updates with all of you. Thank you all. Good luck. Happy home selling. Happy home buying to the realtors out there that are helping everyone. To the plaintiffs’ attorneys, why don’t you go find another industry to pick their pocket instead of our industry that is working hard every day with buyers and sellers? Thank you.

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