While this likely won’t come as a shock, outside the real estate industry, the debate over private listing policy isn’t about what is best for agents. As big companies, policymakers, law enforcement and lawyers have weighed in, the question everyone asks is not what agents and brokers want, but what best serves buyers and sellers.
Unsurprisingly, both sides claim their policies most benefit the average consumer in a home transaction. On the one hand, Compass and its outspoken CEO Robert Reffkin frame the question as about choice, with the option of private listings offering consumers more flexibility—and, in theory, more money.
Compass has gone so far as to sue an MLS that it claims blocked private listing options, specifically recruiting sellers who dropped the price or who were “unable to protect their privacy” for a class-action.
But how do consumers actually see this debate? And with real estate entities on both sides claiming to be pro-transparency, how are buyers, sellers and policymakers understanding real estate practices and structures?
Steve Baird is the president and CEO of Chicago-based independent brokerage Baird & Warner. He tells RISMedia he felt the need to speak out publicly on the private-listing issue because the industry has “taken a position that is pro-the-industry over pro-consumer.”
“I think we just need to get back to a place where we’re being much more straightforward with consumers about how we market their property,” he says.
Those who favor private listings lean on the idea that some sellers will demand—or even need—privacy, either due to some sort of security concern, celebrity status or personal issue. Critics of private listing networks are forced to acknowledge that is true, while nearly all the data shows these situations are relatively rare.
How much this argument will resonate with a broader audience, though, is questionable. Presenting private listings as the space for high net-worth individuals and celebrities to move their eight-figure luxury mansions probably won’t resonate with the average person.
Doug Miller is a consumer-focused real estate attorney, a longtime critic of the industry and one of the original forces behind the commission lawsuits. He claims that consumers are taught to rely on agents, and that agents are taking advantage of that trust—something that will eventually provoke a backlash.
“They know the only way you can convince a consumer to do one of these pocket listings is through deceit. Private network listings, office exclusives, whatever you want to call them, are dishonest and they should not exist and everybody knows it,” he says.
Baird also points out that sellers are usually placing significant trust in their agents, and that some companies will take advantage of that trust.
“I actually don’t think if the consumer was fully informed of what they were doing, that they would make that choice,” he says. “It’s been a marketing ploy in terms of those companies.”
A spokesperson for Compass tells RISMedia private listings are only one part of the company’s strategy, and that it is the holistic three-phase process, which includes eventually listing on the MLS, that consumers find appealing. The spokesperson claims that the process emulates “the most basic principles of marketing,” broadening the target audience little by little over time—something that consumers see in how films or fashion is marketed.
Sellers are not specifically demanding or seeking out a “Private Exclusive” listing, the spokesperson adds, emphasizing that in the end, the only thing sellers want is to unload their property quickly, easily and for the most money. These private networks are only part of that process, and the spokesperson also points out that no seller—working with Compass or any other brokerage—is required to use a private network.
Knowledge and power
By all accounts, consumers are largely not informed about most aspects of a real estate transaction. A Zillow survey from earlier this year found that only a fraction of consumers know what dual agency or an MLS is. The Fed cited a 2024 LendingTree study in its recent analysis of commission rates that found almost half of consumers don’t even know what their agent was paid.
What then, are consumers hearing about the private-listing question, as they decide how to market their homes?
The reality is, most buyers and sellers are probably learning about these dynamics from you. The issue has not received significant coverage from the mainstream media, with only a handful of national outlets covering the decision by the National Association of REALTORS® (NAR) to preserve Clear Cooperation. That gives agents tremendous power to frame the conversation.
According to Baird, the argument that maximum exposure on an open marketplace is the best way to get the most money is an easy one for sellers to understand.
“How can you say, ‘Okay, I have a subset of people who I’m marketing this property to that you’re going to get a better price than if you market it to a larger subset of people?’ That makes no sense to me at all,” he claims.
In the Chicago region where Baird & Warner largely operates, Compass also maintains a significant presence. Despite the company’s aggressive push to promote its new marketing strategy, Laura Ellis, chief strategy officer and EVP at Baird & Warner, claims consumers are not clamoring for a new way to sell their homes.
“We’re not seeing that at all,” she says. “I don’t think that’s really playing well with the average consumer because when we talk to them, it’s intuitively like—this doesn’t make any sense. You’re going to expose my house to 10 potential buyers, whereas another company is going to expose me to a thousand potential buyers that are going to compete for my house.”
But how about on the other side of the transaction? Are buyers susceptible to the implicit threat that if they don’t work with an agent from Compass (or another company with a private listing network), they are missing out on a bunch of essentially off-market properties?
Ellis says so far, she isn’t hearing this fear in the Chicago market—though she adds it is possible that buyers will begin responding to these pressures in the future. The solution is at least partially to encourage consumers to interview more than one broker. Pitting her company’s value proposition against the threat of exclusive listing is something she says she is comfortable with.
The Compass spokesperson calls the accusation that the company is using private listings to woo buyers “false points and narratives.” The spokesperson points to a recently announced book of private listings that can be accessed by anyone as evidence the company is not hoarding listings from other agents or companies.
If consumers are largely trusting their agents to guide them, though, the conversation becomes about individual ethics, and whether agents are truly advising clients to do what is best for them, and not what is best for the agent. Miller says that violating fiduciary responsibilities—which would include any sort of “self-dealing” through private listings—is potentially criminal, but that kind of case is hard to prove.
At a higher level, consumers believe they don’t have to question their agents because of that fiduciary relationship, according to Miller.
“They still trust these people. They rely on them. That’s what you do with fiduciaries. You shouldn’t have to be questioning your fiduciary whether or not they’re looking up your best interest,” he says. “You have an absolute right to rely on them. That’s what it means to be a fiduciary.”
Baird says the responsibility falls on people who train the agents, adding that Compass agents often believe that private listings are in fact the best course of action for sellers. He also points out the sordid history of pocket listings as a vehicle for racial discrimination, noting that rules for private listing need to account for scenarios where sellers are trying to market their properties to one group or area, and not another.
Asked whether Compass agents have a motivation to steer clients toward private listings to “double-end” deals within the company, the Compass spokesperson acknowledges that motivation exists, but points out that 94% of Compass private listings end up “going on the market.” Of the remaining 6%, a “majority” co-broke with another company, the spokesperson says, meaning 3% or less of those listings are double-ended by Compass.
The spokesperson claims that number is not “financially meaningful,” and as a large, highly visible company, Compass is far better served by focusing on long-term strategies and growing the business around service and technology.
“Open” marketplaces and exceptions
While those who oppose private listings continue to advocate for the MLS system as an open marketplace, the reality is that consumers don’t have access to that data, at least directly. Having to explain to a seller why there are 500 separate MLSs around the country that can only be accessed by professionals for a fee, and why putting a listing on one or more of these is the best path to maximum exposure, might be tough.
Baird calls this issue “legitimate.” He points to some MLSs that have successfully built consumer-facing brands and websites as evidence that at least some people in the industry recognize that the marketplace could be more open.
“As a general thing, I think that these things should be open to the public. It goes back to when the internet first came—and this is again, back in a time when we weren’t really thinking about the consumers, when we were literally withholding the price or the address,” he says.
While the technical and practical details are not always so simple, Baird describes paths for MLSs to become more open—with their data and/or through consolidation—to help make the market more consumer-friendly.
Ellis says she doesn’t see any urgent need to expand the rules or exceptions around private listings. She and Baird both point out that their local MLS (MRED) has long had an internal private network, which Ellis claims broadly fulfills the same needs (privacy and delayed marketing) as Compass purports to do with its private-listing strategy.
The Compass spokesperson says that their brokerage would love to be able to share private listings with agents at other firms, but the company is not comfortable with the “structure” set up by portals and the MLSs. Specifically, the spokesperson pointed to “negative” insights like days on market and price changes, as well as how portals like Zillow and Realtor.com® redirect consumer inquiries away from listing agents.
Looking at consumers (or policymakers), it is difficult to argue that getting rid of private listings is all about transparency when Clear Cooperation maintains exceptions to mandatory submission rules—most notably, the so-called “office exclusive,” which was affirmed by NAR and is also carved out in Zillow’s new “listing standards.”
“I’ve always been against office listings. I think there are very few cases where they make sense, but generally they don’t. I think they’re discriminatory and they’re not into the benefit of the seller,” Baird says.
The office-exclusive exemption was cited extensively by private-listing startups that sued NAR and big MLSs—though those lawsuits were eventually settled and dropped.
The Compass spokesperson points out that Clear Cooperation also has exceptions for builders, who also employ a similar phased marketing strategy as Compass is using.
Miller says that the debate over private listings shows that a lot of people in the industry still haven’t learned anything from the commission lawsuits. A lot of class-action lawyers are still closely watching industry practices, he claims, with multiple potential causes of action beyond private listings.
And while people continue to trust and rely on agents (or at least their agent), Miller says that mainstream media coverage is shifting how consumers view the whole industry. He points to a recent New York Times article focused on “workarounds” to commission sharing practices (Miller himself was quoted in the piece).
The New York Times journalist wrote an entire follow-up based on comments from people who also felt they were not treated fairly by their agent, which Miller says is evidence people are beginning to shift their understanding of real estate practices.
“A lot of people say, ‘Oh, my REALTOR®, I trust them. They’re honest, they’re ethical, they’re different than everybody else.’ (Consumers are) going to start looking at what they’ve done and what they’ve said,” Miller claims.
But agents still have a tremendous power to build trust and relationships at the one-to-one level. If the goal is to prove to people that agents will work ethically and competently for their best interests, and that the rules are designed to protect buyers and sellers rather than the agent’s bottom line, that needs to show up in conversations at the kitchen table.
“I don’t have any problem with Compass doing (private listings),” says Baird. “The problem I have is that they’re doing a kind of sleight of hand and not telling the consumers exactly what they’re doing.”
He adds that a disclosure requirement for private listings is not a way to earn trust or prove transparency, either.
“Disclosures are hard because you have disclosures all the time. You sign disclosures all the time. Nobody reads them,” he says.
Compass, on the other hand, is leaning heavily on disclosures. The company just this week announced that an “enhanced” disclosure for sellers will “help sellers better understand their options” with pre-marketing and private exclusives. It will also explicitly inform them that their choice “could impact the final sale price,” but they are also allowed to put their property on the MLS whenever they choose, and are not obligated to accept an offer made before the listing is more broadly disseminated.
Ellis says that she is in the process of adding her own education around private listings into the company’s listing presentations.
“So if I was talking to you about listing your house, I would be explaining what’s going on in the industry. There’s a lot of explaining that has to go on right now because just the changes,” she says.
Explaining to sellers—and agents—that doing things the right way might not be flashy or easy isn’t always a fun conversation, she adds, but it becomes necessary to earn people’s trust in a way that will persist for the long term, and allow a company to thrive.
“A great buyer agent and a great seller agent who’s really looking out for the best interest of their client saves them time and money and aggravation in ways the client will never see,” Ellis says.
