If You Must Hide What You’re Doing, Maybe Don’t Do That

[UPDATE: I heard from Dave Price, CEO of MARIS, about this. Please read the updates below.]

Yesterday, I posted something small just to my friends on Facebook as an illustration of an issue that Sam DeBord and I discussed at length earlier in the week: how brokerages and agents were gaming Clear Cooperation Policy with its office exclusives loophole. A reader sent me the link after reading my post on the topic.

My goal was just to illustrate that I wasn’t crazy or talking about something that just doesn’t happen. This really happens. Here’s the FB post:

Note how it says “This content isn’t available right now.” When I posted it, it was. Within a few minutes of my post, the video was taken down.

Sorry, but I’m not having it. I wasn’t going to make a big deal of it, but now I am. Why?

Because any broker or agent engaging in business practices they are ashamed to have made public is engaging in shenanigans. I believe that it falls afoul of the Code of Ethics, which REALTORS are supposed to uphold.

If you have to hide whatever it is that you’re doing, maybe as a REALTOR you should stop doing that shit instead of just sweeping it under the rug and hoping the attention goes away. No, sorry, now I want to focus attention on this. I’m frankly sick and tired of the lack of transparency from some practitioners, from some parts of the industry.

The Real Estate Minute

The agent who made the video and posted it to the public is Amy Sullivan-Bea, of Berkshire Hathaway HomeServices Select Properties. She works in the St. Charles office. This is her Facebook profile where she posted the original video, then took it down within minutes of my linking to it.

And here’s the original video that she posted, which I have uploaded to YouTube:

In case you might be wondering, I spoke with a very experienced internet IP attorney who assures me that because she posted the video on Facebook, to the public, for the purpose of educating the public as well as marketing herself and her brokerage company, I am fully within my rights to repost it.

If you watch the 2 minute video, it becomes very clear that what she is doing is perfectly legal and legitimate. She and BHHS Select Properties are taking advantage of the office exclusive loophole in Clear Cooperation Policy. St. Charles is part of MARIS, the large regional in the St. Louis area, and MARIS has a “withheld” status which allows for office exclusives. MARIS has that status because it is required to somehow allow for office exclusives under the CCP.

I have reached out to Amy Sullivan-Bea to ask why she took down a video when all evidence is that she did nothing wrong, that BHHS Select Properties did nothing wrong. I don’t know if she was pressured, if she was told to take it down, no idea. Frankly, this post isn’t about her; it’s about the weirdness of taking down a video where she did nothing wrong. There has been no response as of this writing.

Be Proud of It, Or Stop Doing It

The weirdness is that Sullivan-Bea made the video for the people of St. Charles, to educate them on what is actually happening:

Sometimes, we can match up buyers and sellers before we even make the property active on the market. That’s how a lot of this stuff is getting done under the table. It doesn’t work every time, but when it does, it’s beautiful. Because the seller doesn’t have to open up their house for showings, keep their house pretty for two weeks, and buyers usually don’t end up in a multiple contract situation.

She then shows a list of 40 or so homes in the St. Charles area. Then she explains:

And the reason why there are so many is because of market share. My Berkshire Hathaway office is the largest office in volume in the St. Charles County area. We do have the most number of agents, but we also have the largest amount of volume. We beat our competitor’s volume by $52 million…. So, of course you’re going to call me if you ever want to buy or sell a house, but… we’ve got the most market share, so I can get your house in front of the most agents, and if you’re a buyer, I can get you front of the most houses. That’s your real estate education for the day.

There is absolutely nothing illegal, against the rules of the MLS, or anything about any of this. Everything she said in the video — to educate the public — is true.

Sometimes properties do get sold off-MLS, before it ever goes active. Apparently that is how a lot of transactions are done in St. Charles County. When it works, it’s beautiful, because the seller doesn’t have to deal with the pain that is selling a house, and the buyer doesn’t have to compete as much.

BHHS Select Properties is the largest operation in St. Charles County. They have the most agents, do the most volume, and apparently this week, have some 40 listings that are not active in the MLS. If you want access to those 40 listings, you have to contact a BHHS Select Properties agent.

None of that is false, none of that is disallowed by the rules or the law or anything.

So why take down the video when I link to it?

The only explanation is that this practice of office exclusives is something that somebody somewhere doesn’t want highlighted. I don’t know if that somebody is Amy Sullivan-Bea, or her broker at BHHS Select Properties, or someone from the MLS. I know it isn’t anyone from the St. Charles Association of REALTORS because I chatted with its CEO, Jeff Hebb, and he wasn’t aware of the video.

That somebody is not proud of this off-MLS buying-and-selling. That somebody doesn’t want to call attention to the fact that this is often how things are done, under the table. That somebody would rather not have the public be educated about the realities of real estate.

My take is simple: if you’re not proud of whatever it is that you’re doing, then maybe stop doing that thing. Whether it is legal or allowed under the rules, if it is something you don’t want widely publicized, then stop doing it. It’s obviously shenanigans that you’re not proud of. Then don’t do it.

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UPDATE: I just got off the phone with Dave Price, CEO of MARIS, the MLS for St. Charles. He told me that it was he who reached out to the broker of the office and asked that the video be taken down. However, there’s more to the story.

I know Dave, and he’s one of the good guys. He told me that the reason he asked that the video be taken down is because Amy Sullivan-Bea displays a sheet with the 40 properties on it for approximately 3 seconds, from 1:21 to 1:24 in the video. He thought that a savvy buyer or agent might be able to freeze the video, take a screenshot of it, then enlarge it so that the information on those properties can be gleaned.

That would turn this video into “public marketing” under the office exclusives exemption to the Clear Cooperation Policy, and result in those 40 properties needing to be put into the MLS within 1 business day.

Plus, Dave was concerned that those 40 sellers who opted for an office exclusive for whatever privacy concerns they might have would inadvertently be mis-served by this brief exposure on Facebook.

We can differ on that overabundance of concern, and I do. However, two things are clear:

1. There is no evidence that either Amy Sullivan-Bea or her brokerage took down the video because they were not proud of the practice. I do not know how they view office exclusives as a practice, but it is absolutely clear that they did not take down the video before being contacted by the CEO of MARIS, Dave Price.
2. This policy sucks all kinds of ass, because it puts Dave Price in the position he’s in. Whether he or anyone at MARIS does or does not agree with the policy is irrelevant. Whether the office exclusives loophole is or is not justified is irrelevant. On the letter of the policy, Dave has to ensure that no public marketing of office exclusives (“withheld” status in his MLS) occurs. And at least in theory, the 3 seconds might be enough to constitute “public marketing.”

I do not think so, but wanted to test it for myself. I took a snapshot of the video, then enlarged it as much as I could:

Maybe there are NSA-level image enhancement tools out there that could make this legible, but I don’t have those tools. Plus, the paper looks reversed as it would on a camera. Good luck trying to figure out what these 40 listings are and where they are.

Nonetheless, if I were in Dave’s shoes as the CEO of an MLS required to follow Clear Cooperation Policy rules… then yeah, I too might have called Amy’s broker and asked that the video be taken down.

What a crappy situation. What a crappy rule, as written today. Time for a change.

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The Code of Ethics

I wrote above that this feels like a violation of the REALTOR Code of Ethics. Here’s why:

Article 12

REALTORS® shall be honest and truthful in their real estate communications and shall present a true picture in their advertising, marketing, and other representations. REALTORS® shall ensure that their status as real estate professionals is readily apparent in their advertising, marketing, and other representations, and that the recipients of all real estate communications are, or have been, notified that those communications are from a real estate professional. (Amended 1/08)

The SoPs to Article 12 are all about various things, mostly having to do with advertising, but none of them are directly on point. However, I would argue that the phrase “honest and truthful” is really what Article 12 is about.

If you’re engaging in business practices that you are not willing to be honest and truthful about, and taking down a video that is intended as a “real estate education for the day” strongly suggests a lack of willingness to be honest and truthful, then you are violating at least the spirit of Article 12, if not the letter of it.

Let’s leave the MLS out of it for a minute. The REALTOR Associations — local, state and national — ought to take a long hard look at the lack of transparency in the industry and decide whether that is copasetic or not. If REALTORS are engaging in business practices they don’t want the public to know, should those practices be allowed under the Code? After all, aren’t REALTORS supposed to eliminate practices “which might discredit or bring dishonor to the real estate profession”? That’s right there in your own Preamble to the Code of Ethics.

Well, dammit, start living up to your own words.

Don’t Creep

I think this little episode so clearly illustrates why the office exclusive exemption is such a disaster, and why Clear Cooperation Policy is in dire need of reform. If brokers and agents who are in full compliance with the CCP are ashamed to publicize it, even go so far as to take down videos on Facebook… guys, what the hell are we doing?

Can we please, please stop creeping on the down low, ‘cept nobody is supposed to know? Be proud of it, or stop doing it. Else, the public is fully justified in thinking y’all are… well… creeps.

-rsh