The Multiple Listing Service (MLS) system is an integral part of the home-selling process as it exists today. In fact, a new report by Zillow has found that if homesellers step outside the MLS network, they tend to get a lower final sale price for their listing—especially sellers from communities of color.
Zillow found that homesellers who did not list their property on an MLS collectively lost more than $1 billion in 2023 and 2024. All homesellers experienced a median difference of a 1.5% lower sale price if listed off of the MLS. That median difference dollar amount comes out to a loss of $4,975.
The loss effect in communities of color was higher, where off-MLS listing sellers saw a median difference in sale price of 3.2% compared to on-MLS listings. (The dollar amount of the median difference was $9,851.)
Industry disputes about the role of the MLS have been heightened by the controversial Clear Cooperation Policy maintained by the National Association of REALTORS® (NAR). The policy, which mandates agents list on an MLS within 24 hours of publicly marketing a listing, faces an uncertain future.
Supporters claim Clear Cooperation ensures greater transparency in the market, while critics allege the stifling of competition to MLSs. The Department of Justice (DOJ) appears to have taken a significant interest in Clear Cooperation, and some real estate industry professionals have said the policy could spark antitrust lawsuits.
Compass CEO Robert Reffkin is a vocal opponent of Clear Cooperation, and Compass has been pushing plans for a private-listing network outside of the MLS structure.
Compass’ plans have attracted mixed responses. In an op-ed published by RISMedia, Brown Harris Stevens CEO Bess Freedman characterized private listing networks as a “Trojan horse.”
“(A private listing network) hurts sellers by delaying their homes hitting the open market in front of a global buyer pool, and it’s also a detriment to buyers by contributing to the national inventory crunch,” wrote Freedman.
In the study of private listings, Zillow broke down how sales affected specific racial groups. In majority Black neighborhoods, the median difference was 3.1% lower sale price for off-MLS listings. (Dollar amount was $5,576.)
Majority Hispanic neighborhoods saw the highest median difference in sale price between off- or on-MLS listings: 4% less for off-MLS listings, or a $13,728 dollar amount.
Majority white (not Hispanic) neighborhoods saw the smallest median difference of off-MLS listings being 1.2% lower than on-MLS listings. This dollar amount comes out to a $3,964 difference.
The report suggested that these discrepancies that disadvantage communities of color can come from agents more frequently recommending private listing networks to Black and Hispanic homesellers. Seventy-four percent of Hispanic homesellers and 73% of Black homesellers surveyed told Zillow that their agent recommended they list on a private listing network. Only 24% of white homesellers told Zillow that their agent recommended they do so.
Zillow’s methodology in tracking private network listing sale prices
According to Zillow’s report, researchers analyzed 10 million transactions and found 3.79 million of these transactions met criteria to be included in the ratio.
Said criteria for “privately listed sales” were those that “seemingly” only went onto the MLS once a purchase contract was in place. Transactions that were never listed on the MLS at all were “parsed off,” the report said. Also excluded from the report were the following types of listings:
“New construction homes, foreclosure sales, auction sales, non-arms-length transactions, bank/corporate/government acquisitions, invalid quitclaims and outlier sale prices (below $10,000 or above $10 million).”
To determine the impact of listing strategy on final sales price, Zillow compared the sale price with its own Zestimate for the home three months prior to the sale. Shifts in the market were accounted for by the Zillow Home Value index.
“Communities of color” was determined by zipcode analysis, and are defined as communities where the majority of household heads are Black, Hispanic, Asian-American and Pacific Islander or Native American.
“It is especially critical that buyers see all homes for sale in an inventory-constrained market like today’s, where there are 26% fewer homes for sale than before the pandemic,” the report reads.
For the full Zillow report, click here.
