Key facts
- Senator Elizabeth Warren is investigating a partnership between Compass and Midwest Real Estate Data (MRED).
- Warren fears the deal could create a two-tiered housing market, limiting access to listings and data for non-members.
- She argues this could increase housing costs, worsen inequalities, and destabilize the mortgage market.
- Concerns were also raised about potential harm to fair housing and civil rights protections.
- The House Judiciary Committee is also probing similar real estate practices.
- The NAACP president has also criticized private listing networks for their potential to disadvantage buyers and sellers.
Senator Elizabeth Warren has initiated an inquiry into the partnership between real estate brokerage Compass and Midwest Real Estate Data (MRED), a major Multiple Listing Service (MLS). In a letter sent to the CEOs of both companies, Warren expressed significant concerns that the expansion of MRED's private listing network (PLN) nationwide, in collaboration with Compass, could lead to a bifurcated housing market.
Warren fears that this arrangement will grant exclusive access to housing inventory and market data to MRED members, effectively shutting out other agents and consumers. She argues that such exclusivity could increase industry consolidation, drive up housing costs, and worsen existing inequalities in the housing market. The senator highlighted that private listings may obscure crucial data like days on market and price history, which are vital for accurate appraisals and negotiations, potentially destabilizing the mortgage market.
The partnership is particularly concerning due to the substantial size of both Compass, the nation's largest brokerage, and MRED, one of the largest MLSs. Warren noted that Compass has entered into similar agreements with other MLSs and has sought to influence MLS policies to expand its control over listings, many of which are then hidden from public view.
Furthermore, Warren suggested that the partnership could increase costs for buyers and sellers, as non-Compass agents and brokerages may need to pay to access these hidden listings. A Zillow study cited in the letter indicated that homes sold off-MLS typically sold for less, resulting in significant equity losses for sellers. The senator also pointed out that brokerages could profit by "double ending" deals, earning commissions from both buyers and sellers, to the detriment of consumers.
Beyond market impacts, Warren raised fair housing concerns, suggesting that restricting access to listings could disproportionately affect first-time buyers, lower-income households, and underrepresented groups. She criticized Compass and MRED for moving away from the National Association of Realtors’ Clear Cooperation Policy, questioning if this weakens safeguards for transparency and fair housing compliance.
In addition to Warren's inquiry, the House Judiciary Committee's Subcommittee on the Administrative State is investigating whether real estate companies are using PLNs to stifle competition. The NAACP president, Derrick Johnson, also voiced concerns in an op-ed, arguing that PLNs threaten housing market transparency and could lead to discriminatory practices, applauding states that have enacted laws to govern these networks.