The issue of private listing networks is not confined to real estate policy; it has also caught the attention of lawmakers nationwide. Several states, including Washington, Illinois, Wisconsin and Connecticut, have passed or considered laws that mandate real estate listings be publicly accessible, a potential limitation on the exclusivity offered by private networks.
Now, New York is considering similar legislation; as the fourth most populous state in the country and the one with the third highest GDP per capita, this represents a significant step.
The bill, introduced late last month, has been dubbed the Fair and Transparent Real Estate Listings Act. The introductory text of the bill echoes common criticisms of private listing networks, reading that, “practices that keep for-sale homes off broadly accessible public platforms, including use of private listing networks or similar restricted-access systems, can limit the ability of buyers and their agents to identify and compete for available homes, reduce the pool of potential offers to sellers and risk lower sale proceeds, and exacerbate segregation and inequities by making some homes effective.”
To that end, the bill updates New York state law requiring that real estate listings be listed in a way accessible to buyers or real estate professionals such as an MLS or a public website. The exception is if sellers sign an opt-out form allowing for private marketing; the standardized form to be used by agents and sellers is included in the text of the bill.
Reactions from New York’s real estate industry
Bess Freedman, CEO of Brown Harris Stevens, told RISMedia that both she personally and Brown Harris Stevens as a company support the bill, and that the brokerage has given agents who support it the information needed to reach out to lawmakers.
“Brown Harris Stevens supports the legislation because it will hopefully enact policy that will do what brokerages should have been doing all along: telling their sellers upfront that Private Listing Networks limit competition and constrain price,” said Freedman. “There are also potential issues that could come from fair housing violations. No one wants to go back to a time where the consumer is locked out of the real estate market.”
In multiple op-eds previously penned for RISMedia, Freedman has criticized private listing networks and Compass framing the issue as a matter of “seller choice.”
Freedman reiterated her criticisms in comments to RISMedia.
“I believe the narratives for a truly private listing and a private listing network have become so conflated, and they are not the same. True private listings are done for discretion; private listing networks keep inventory within one brokerage away from other brokerages, agents and willing buyers,” Freedman argued.
“New York joining other states in this effort to restrict private listing networks shows more policymakers are waking up to what’s happening—and it’s not simply about seller choice because sellers have always had the choice to transact off market,” Freedman continued. “It’s now shedding more light on how some brokerages are enlisting their clients to partake in a practice that may not be in their best interest, and agents not adhering to their fiduciary duties. The interest of the client comes first, always.”
The New York State Association of Realtors® (NYSAR) Vice President and Chief Lobbyist Mike Kelly, speaking on behalf of the association, told RISMedia that “NYSAR does not have a position on (the bill) as it’s currently drafted.”
“Generally, we are supportive of the principal goals of the legislation to ensure the visibility of real estate listings to the public, while at the same time preserving consumer choice regarding the marketing of their property,” said Kelly. “We are in conversations with industry partners regarding the legislation and potential amendments, and we will be conveying NYSAR’s perspective to state lawmakers and the Governor’s office.”
In a statement supplied to RISMedia, Real Estate Board of New York (REBNY) President James Whelan did not explicitly take a stance of support or opposition to the legislation, merely stating that: “This legislation is consistent with industry standards established for the REBNY Residential Listing Service,” referring to REBNY’s own listing network, RLS. (As REBNY is not affiliated with the National Association of Realtors®, RLS is not technically considered an MLS.)
