Gary Wayne Gold, executive vice president at Hilton & Hyland in Beverly Hills, is not one to shy away from a challenge. The prominent listing agent has sold thousands of homes, including most notably, the Playboy Mansion for $100 million. In September, Gold sold the Beverly House, a Los Angeles mansion once owned by William Randolph Hearst, for $63.1 million.
Inman caught up with Gold to ask how that work is going and to ask for the veteran agent’s thoughts on a couple of controversial topics in the real estate industry: the way commissions are currently structured and the Clear Cooperation Policy, a National Association of Realtors rule which requires listing brokers to submit a listing to their MLS within one business day of marketing a property to the public.
The latter is designed to curb pocket listings. Some real estate brokers have threatened mutiny over the policy’s exemption for office exclusives, or listings marketed entirely within a brokerage without submitting them to an MLS. They argue it inadvertently benefits large, national brokerages at the expense of smaller, independent brokerages.
Gold is against the policy for a different reason: He argues the exception restricts how sellers can sell their homes and makes listings even less accessible.
This interview has been edited for length and clarity.
Inman: The last time you talked to one of my coworkers, you were talking about the Malibu Series. How’s that going? Have you sold all 15?
Gary Gold: When I talked about them last they were just really starting construction. Now they’re almost finished. They haven’t really been on the market yet. We’re building all of them at once. I don’t know anyone that has ever built so many high-end homes all at one time. It’s a monumental task.
How do you go about finding buyers for properties like that? Has that part started already?
It’s a combination of hunting and gathering and trapping. So, a lot of publicity on the house. The big difference between homes like that is they’re really, really targeted and they’re only looking for a few people and it’s only this small group of people that would be suitable for a home that price range.
A lot of it has to do with knowing both people who buy homes like that and people who represent the people who buy homes like that. Networking is really the most important thing.
I wanted to ask you about a couple of hot topics in the industry. One of them is about commissions. There are these big lawsuits and the DOJ getting involved in how commissions are split between buyer brokers and listing brokers. Do you have any thoughts on that particular issue? Do you think it should stay the way it is?
Well, it works for me. I have no problem with it. I don’t know why the government is involved in telling us who pays who what. A buyer and a seller can do anything they want. No one’s forcing anybody to do anything. It’s not fixed.
So, I guess if I have an opinion, that seems like overreaching to start telling real estate agents and buyers and sellers how to be compensated and how to compensate. The marketplace will always speak last. If there is no demand for that kind of model, it’ll change.
The other topic I wanted to ask you about is the Clear Cooperation policy. Any thoughts on that one?
Oh my god. Yeah. The Clear Cooperation Policy is the most nonsensical, stupid law I’ve ever heard of in my life.
This is people making rules and they have no clue what the real world is like. It makes no sense. I abide by it, but they say that the purpose of the Clear Cooperation Policy is that buyers all get a fair share to see what’s available on the marketplace and no one’s keeping pocket listings away from anyone.
You don’t get singled out if you don’t know about a pocket listing. That’s the intention: This is more fair for buyers.
But it absolutely does the complete opposite. It makes less people aware of what’s available. As an agent, I can’t market this to another agent. I can’t. It keeps me from being able to market a property freely and expose it to as many people as possible. So, it’s the total opposite.
But the real intention is that the powers that be want to have control over the situation. They don’t want business being conducted that’s not under their umbrella.
And the problem with that is eventually the public is going to do what they want to do. Eventually the seller’s going to go, ‘I don’t like this.’
And all of a sudden, you’re creating the opportunity for a whole other industry other than ours to start selling houses and not being members of [the California Association of Realtors] or NAR, that are doing their own thing and they want nothing to do with them and they sell homes how buyers and sellers want to sell homes. And all of a sudden our industry is fragmented.
You mentioned that the Clear Cooperation Policy keeps you from being able to market a property properly. How does it do that?
You can’t freely market your property. How does an office exclusive exception make it better and get the property in the hands of more people? It does the opposite. Now, less people have the opportunity to be aware that the house is for sale.
It’s really shortsighted to create laws that apply to farms in the Northeast and beach houses in Malibu and mansions in Chicago and high rises in New York. They all have a different set of dynamics that makes it very unique how things are sold in different places.
Houses that sell for $100 million are a very different experience from houses that are selling for $100,000, and they’re trying to take one rule and apply it to everything. It makes no sense.
It has nothing to do with the consumer. I think it’s all about remaining relevant and having some control. Maybe their intentions are good. I like the fact that there is an oversight of the business we do so there’s good practices, but I’m not in love with the fact that they’re putting their own best interests ahead of agents and, in turn, our clients who want to do something.
Do you think that the office exclusives exception should be eliminated?
I don’t think there should be a Clear Cooperation Policy. I think you should be able to market a home any way your client wants you to market it. My clients, as soon as they figure it out, they’re gonna do things the way they want them done and they’re going to go hire someone else to do it.
The intention, I believe, of the Clear Cooperation Policy is to give the public fair access to all listings. I think it’s accomplished the exact opposite.
What it’s done is now if you have a pocket listing — and that’s the way it’s got to be because of what your client wants and has decided — you can only show it to people within your office. That’s the opposite effect. You can’t advertise it to the public. You can’t tell brokers outside your office. It accomplishes the exact opposite goal.
And it seems like NAR’s position is, ‘We’re going to make it so uncomfortable for people to do it the way they want to do it, we’re going to force them to do it our way.’
The second point is when you do that, you create an opportunity because you literally created a pain point, you literally created the opportunity for someone else to infiltrate your business.
Why would a seller want to keep their home off the MLS?
I’ll give you a number of reasons. What if you are a celebrity? You only want to show it to really qualified people. You call your trusted agent and say, ‘Can you quietly make a few calls.’ They don’t want to be bothered. ‘I don’t want my neighbors to know.’ Also, there’s a bunch of buyers that would love to buy a home that never hits the market.
The Clear Cooperation Policy kicks in if public marketing occurs. You don’t have to put it in the MLS if you don’t publicly market it. So what’s the issue there?
You’re limiting people’s options of how they want to go about doing it. There’s a lot of sellers — and I’m not necessarily saying it’s a good or bad reason but it’s the way they want to be — there’s something about putting it into the MLS and having the clock start ticking and have it on the market that they want to avoid. They feel that it’s getting tired. They’re maybe not fully committed to the process.
On the high end, you will have people go through this whole gestation process, where they’re going to start with ‘If you have anybody, let me know. If you have a buyer, I’ll show them the house.’
Then all of a sudden, you might say, ‘Well, maybe I’ll put it on our website or put in an ad for an off-market listing.’ That’s very intriguing, by the way. In commercial real estate, there’s a large portion of investors that if it’s in the MLS, they don’t want to see it. They only want to look at off-market properties.
Something off-market could end up selling for more than it’s worth. In a hot market also, someone might be really more than willing to pay an absolute premium to buy something that they don’t have to compete with anyone else on.
But then how would you know that they’re paying more than the house is worth, if they’re the only one?
Neither of you necessarily do. They’re making their own judgment call. But it’s not for you or for the NAR or for anyone else to determine. This is a very, very common thing.
Even in the MLS, people want to buy something before it hits the market, before there are other offers. They don’t want to be in a multiple-offer situation. And that situation, it can work both ways. The seller can end up getting a premium; the buyer could end up getting a better deal.
People also just don’t want to be used as some kind of stalking horse. They want to write an offer and then that will create other offers. It’s a whole dance and it’s a game.
I sold my own house about five years ago. I had two little kids and the thought of having people come through my house, and having to show it a bunch with my kids — I was going through a divorce. I didn’t want to do it. The idea of showing the house under those circumstances, I’d just rather not.
Our neighbor, who was both friends with me and my ex, always wanted our house. She came to us and wanted to buy it. We sold it to her. Never showed it. Loved it. Couldn’t have been more happy.
There’s all these different variables and people want to do what they want to do and it’s not up to NAR to tell them how to do it.
They can tell us how to function, but when they’re not involving our clients and making it difficult for them to do something the way they want to do or the way we’re advising them to do. It’s not a good thing and it will backfire. I think it’s real dangerous.
I think the idea that sellers should sell how they want to sell is very appealing to people, but on the other hand, when it comes to fair housing they can’t sell how they want to sell. They can’t sell to a family because they’re a family. They can’t sell to a Black person because they’re a Black person. Housing is special in that way.
Yeah, of course. There are protected classes. You can’t discriminate, but this is not discrimination what we’re talking about.
Well, if a seller says, ‘Hey, if you bring me a buyer I’ll consider it,’ well then they’re limiting it to just the people you know, who are very likely to be like you.
That’s a stretch. There are protected classes and there’s discrimination. This has nothing to do with discrimination. That is not the intent.
I’m not saying that’s the intent. But it might have the same impact.
No. How? How’s that possible?
Among the people you know, they’re probably not representative of the entire gamut of the would-be buyers that would appear on the MLS.
I think it’s only discrimination when it’s intentional. That’s all that really matters. I guess anything’s possible. I guess if you have open houses on a Tuesday, it could discriminate against people who don’t show up on a Tuesday.
If you paint your house blue and your religion doesn’t allow you to buy blue houses, you might be discriminating unintentionally the anti-blue house people. But that could just go on forever.
Proponents of the Clear Cooperation Policy say the accessibility of homes should not be dependent on who you know.
I don’t know who came up with that one. But I’m Jewish and really Jewish people don’t work on a Saturday. They don’t answer the phone on Saturday. So if someone wanted to have an open house on a Saturday, would that be discriminating against Orthodox Jews? If you have Sunday open houses, would that be discriminating against people who go to church?
That’s not the intention of the Clear Cooperation Policy, not at all. I just don’t think that’s the reason why they want to do this, because they think there’s this rampant discrimination going on because of pocket listings. It’s taking it to a real absurd level here. The whole pocket listing [practice] isn’t some grand plan to discriminate against certain people or who you know or who you don’t know.
Every situation is different, it’s unique. If you put your house on the market, should you have it on the market long enough so every person on the planet would have ample time to get there? When the borders are shut down, should you not be able to sell your home because people outside those borders aren’t able to fly here, so you’re actually discriminating against anyone because they’re not in town, and they can’t have access to here?
What do you think is the intention?
I think the intention is to remain relevant and be in control and have their hand in every transaction because they see it potentially slipping away with pocket listings. They want to remain in control of transactions and pocket listings were starting to become, in certain areas, prevalent.
Nobody is kidding anyone. It’s kind of the authoritarian trying to dictate to the members, who they are beholden to, how to do business and also trying to think that we’re all the same.
If we were all the same around the country, we would only need the NAR. We wouldn’t need the C.A.R., we wouldn’t need the local board. We could all just have one thing. But it’s all different.
Real estate’s very local for a multitude of reasons: values, corporate marketing, and the way business is done.