Real Estate Broker Compass Sues Listing Service Over Marketing Rules

Real estate broker Compass sues listing service over marketing rules

In any real estate market, insider advantages often emerge from niche practices—one such example is the use of “Office Exclusive” listings. These are properties marketed only within a brokerage or company network, rather than being made publicly available through the MLS. Compass, a New York-based firm, recently argued that brokerages should have the right to promote listings internally—such as in the Pacific Northwest—before being required to share them more broadly. The local MLS, however, contends that such listings limit transparency and can disadvantage the general buying public. Compass, in turn, claims that preventing this practice unfairly restricts both sellers and their agents, undermining the flexibility needed to craft effective selling strategies.

This debate follows closely on the heels of national rule changes stemming from the 2024 commission lawsuits, which now prohibit listing agents from advertising what sellers are willing to pay in buyer-agent compensation. Previously, higher offered commissions often influenced which homes agents chose to show—human nature, after all, tends to favor incentives. In my own analysis of the Southern Utah market, I reported on this trend. Just before the rule changes, I conducted a detailed study of average commission rates: while some properties offered less, the vast majority leaned toward 3%, with the average sitting at 2.75% across hundreds of sales. I also tracked how lower commissions correlated with longer days on market and greater price reductions. The data clearly showed that listings offering 3% or more in commission sold faster and were less likely to undergo significant price cuts.

Both the push against office exclusives and the commission advertising ban represent, in my view, an overreach into free-market business practices. Imagine telling a restaurant they can’t promote a discount coupon because it wouldn’t be fair to diners who didn’t know about it. That would be ridiculous—yet that’s precisely the kind of restriction being imposed on real estate professionals today. I suspect these rules will face renewed legal challenges in the near future.