What is a “private” listing?
Short answer, not everyone agrees. Cooperation—that is, brokers sharing their listings with all other real estate professionals in order to facilitate a sale—has long been the default practice in residential real estate. The National Association of Realtors® (NAR) traces the first precursor to a “multiple listing service,” or MLS, back to 1885, when the San Diego association required brokers to share listings with each other on a daily basis.
The MLS has evolved a lot since then, now hosted on high-tech digital infrastructure, with listings shared nearly instantaneously around the nation. But since those earliest days, some agents have been more selective with who they share listings with.
“Pocket” listings
Since the formation of the MLSs, agents have attempted to sell properties through more informal channels—direct relationships with other agents, or even straight to buyers (who they might simultaneously represent in a “dual agency” transaction). The reasons for this are numerous, but historically included racial discrimination—properties in predominately white neighborhoods were withheld from non-white prospective buyers. According to a landmark 1983 FTC report, pocket listings were also commonly used to sell “low-priced, easy-to-sell” properties, and anecdotally happened more in small towns where a broker’s professional connections meant more than MLS exposure.
There has never been a “generally accepted” definition of pocket listing, but for the most part is understood to mean anything that was marketed off-MLS. The term is often used synonymously with “private listing,” though “pocket listings” are more often associated with the pre-internet era when these properties were kept (sometimes literally) in an agent’s pocket rather than on a walled-off digital platform.
Going private
In 2019, NAR approved a mandatory policy for MLSs called Clear Cooperation, which among other things, required Realtors® to submit their listings to the MLS within one business day of other public marketing (e.g. a social media post or a sign in the yard).
Five years later, NAR made significant revisions to the policy after pressure from some inside the industry. Part of that change was creating a new category, called “delayed marketing except listings” or DMEL, that allows MLSs to create some flexibility for their members around where a listing will appear (on Zillow, for instance) and how long before it needs to be shared broadly with the MLS. Many MLSs independently have implemented their own policy updates, and states have passed laws regulating the practice.
How they are used
Most real estate professionals generally agree that there is a place for private listings—usually pointing to specific scenarios where privacy is a primary concern for a seller (celebrities, divorces, etc). Other agents and brokerages use the practice to build interest as a marketing strategy.
A significant portion of the controversy from private listings comes from how brokerages use them. Controlling a large amount of exclusive inventory is a powerful tool that allows companies to recruit agents and build market power. Many have worried that competition to obtain more private listings will fracture the market and cause agents to pressure sellers into utilizing a brokerage’s exclusive platform.
The bottom line
So what do most people mean when they refer to a “private” listing? Usually, it is a listing that is not entered into the MLS, and is also not available on public platforms (where anyone can see photos, price and other details). Some people refer to any listing that isn’t on MLS as “private,” even if it is fully visible on consumer-facing websites. Other questions—whether the practice is a positive one for consumers, whether private listings can sell for a higher price or even how prevalent the practice is—remain hotly debated.
